Special Market Letter

The lollowiiiET raarltet letter is fnrnishcil us by MuLain Hijos. & Co., Coiilillission Merchante, liialto Building, Chicago: Tlie bank cleaiïnps for lust week reÜect l'ully the unfavorable aspect of affaira ut'the SOuUl, and l!u' inisetUed sUilc of the stock market, which lias been irregular and uncertain. The coutiuued druin on Uie New York deposita necessitates a curtailment of [oans in order to ïnotect the reserves, aii'l imlcsstliegold imports. whicli liavc now begun, assume proportions lince L-nouRli to ofláet the decreasing deposita interest rutes wiil naturally adyance, and act as a retarding influence in the upward movement of securities. Higher rutes w i II tend to curtail purchases by Americansof.tlieir securities aliniiid. and reuder it necessary for t'oreigiier.s to meet tlieir debit balances vvith gold. The ulloils ou the one hand to secure larpe importatious of the precious metal, and on the other to prevent it, wiil bc watched -vitli interest by all wlio are interested in our foriign trade, aud especially by speculators, whose success dependa lipón the nnüd pation of the resnlt. Apparently the only way that foreignera can retain gold is to materially decrease tbeir pinchases of American merebandise and agricultural producís; and tlieir supplies of the latter are so manifestly insuffleient to meet present and future requirements that it wiil require rigid economy to confine tlieir pur(ïiases to qiKintilies that wiil materially curtail the kM movement. Thai ihey t'ully realize the sitiialion is eviilencod by tlieir willingness to return jur stocks at prices which are afiording payjug dividends, and by the tardiness wiih which the United Kingdom is supiilying its lood deficiencias. Thia IVat ure of the situation is doubtless partialiy responsible tor the pause in the foreign wheat demand, and for tlie lendeiicy to decline which our Uut has showii despite the . ing influeuce of the protracted droutb, wbiuli lias Uready deereased the prospective urea of tlïe next erop. Continental Europe, having bought freely wlien the defleiency in its crops waa iiscertahied. ís now reoeiving wbeat in roiume sufricrent to more than meet present requhements, and is therefore in position to await developments; hut the United Kingdom lias small stocks, md lias made lint little provisión for the future, evidently preferringto wait tintil compelled by necessity to buy. qr imtil exporting countried offer tlieit surplus at lower prices. While it maj rtefei' pinchases for a time, and therebj assist in depressing prices, it cannot be indeflnitely postponed, and if too long delayed will iind the continent again on the market as an active competí tor. The premiums commanded by spot wbeat over futures tends to Increase available supplies more rapully than the miignitiule of the world"s crops would warrant under normal conditions. umi apparently controverts the shoit supply tbeories. Altbougl) increasing stocks may for some time render foreign buyera indifferent, and encourage short selliii-;, they wil] not add ;i busliel to the total supply and eau only delay the inevitable demand. Kor the present advancing markets must ilepeud on weathei1 conditions iu America and in southern liemispbeie countries, for, with stocks at Busslan ports large enough to afford liberal exports trom there nntil navigution closes, and the present volume of northwest receipts, the market will have but liule support from immediate scarcity. Weather conditions, liowever, may outweigh all other influentes, and will be the cbief buil reüance. There have been complaints of drouth and frost from Argentina, and of droutli from the winter vvlieat secüons of our country. Early and abundan'., rain.-; will slill permit the seeding uf a large area, but if the drouth continúes inany weeks longer the situatioc will become acute. The corn uaarket has also feit the cf'ects of the dronth, bufc its inflaence !-,as been to check a decline rather than I o excite au advance. ïhe drying up ol' pastures and the consequent liberal feeding Trom Ukj new erop. is is eiïect;ia!Iy curlailing supplies from it a3 if rost had destroyed it. a'nd will in time :iiore noticeably affect prtces; bnt it present, while stocks are Ittrge and the eastern consumptive and export de;:ia)](ls ave lighter, the umisual consuinption will not be so pronouncedly feit. There is. however.a large specuhitive interest in the market and should ihe di-outh advance wlieat it will be luickly reflectéd in the renewed buying ot' corn on a large scale. There have been no important changes incropestima'.es, bul the early feeding is imincing country dealers to ship less fieely. ïhe visible supply of grain in the (Jnitèd States and Canada shows the following clianges lor the past week; iVIieal increased 1,561,000 bu, corq inéreused 1 .451.01)0 bu and oats decreaseil g},000 bu.