The times., 1901-06-16

1
! alone by the unwary. on the other
| hand, il must be admitted there are feW
! heariSh elements in the situations IN iaGtI
| almost meme. except the high prices OF
| certain stocks and the possibility of fric-
| tion developing in some Of the big deals
! nov under way. which would preclpl-
! tate sharp reactions, the Northern Paci-
! nc slump being still smartng reminder
/ With easy money, July disbursements,
! good crops, large railroad earnings; and
| good general business in sight. there is
! every prospect that the market VIII grad
! ually harden and improve if left to it
self. What it will do under manipulation
remains to he seen.
Easy money is likely to prevail until
/ the crop demand begins in August. Last
/ weeks drop in the bank reserves was
| surprise, but as this was due to trans
! fers connected with Important stock deals
! it eNertcd only temporary effect. In all
! tho principal money markets of Europe
! easy rates prevail, as illustrated by the
! ;duCtion of the Bank of England rate to
I 3 per cent. and with increasing supplies
| of gold from the Klondike and the Trans
/ vadi in addition to other liberal supplies
| there is little prospect of any Immediate
stringency.
The June Government crop report in
! diCated heavy wheat crop In sight with
| the possibility of beating the record Some
estimates went as high as 6S3 0O0,OOo and
| others GIG00O O,000. Last year we had a
! crop of only ~. 100000, so that we are
! comparatively sure of another year OF
! prosperity for the farmers and the rail-
| roads. with a liberal margin Tor later
damage from weather conditions. The
| wonderful demand for iron and steel has
carried us into a new record for their
manufacture which is now going on at
| a rate Of over 100000 tons per week in esl-
| cess of last years great output And in
/ the face of this, stocks at furnaces SNOW
| a decrease. Railroad earnings continue 10
| make very handsome gains hence conii-
dence in railroad securities is wei main
| tanned. even at present high prices.
The latter are as everyone knows very
| largely due to the great consolidation
! movement which is rapidly placing our
railroads in the control of a few men ana
enSurinE more stable conditions Of rail
| road management. Speculative operators
| are. of course. using this leverage on the
| market for all il is worth. and while
| stocks are so largely concentrated in
strong hands as at present their ability to
! lift prices is unusual II should be re-
membereG, however, that the big men
| have stocks to sell. and that rs hereto
| fore they will lessen their holdings on
| rising market. This transfer of stocks
| from strong hands to weaker ones is the
| danger point that must be watched, and
we are constantly drawing nearer to it
| The granger securities have been strong
! during the past week. This has been due
! partly, perhaps. to the good crop outlook,
| bat for the most part the advances should
be attributed to causes other than those
relating to intrinsic values 1t is not to be
supposed that St Paul is worth $50, or
Rock Island 10 or Atchis0n common 50
to 90, on their present basis. And II Is not
very likely that they viii be worth these
prices at any time in the near future. 1t
is only TO be inferred that the develop
ments in the harmony plan in the West,
! whatever they may be. have made the
boom in the stocks The outsider can
! know nothing of these plans, or of their
effect on the stock market until the move
ments are over, in large part a. least.
For this reason speculation In the group is
not to be recommended. There Is shrewd
suspicion among conservative people that
the bulge in st. Paul this week to above
$50 has been due largely to manipulation,
and that this stock, with Rock Island and
Atchison common. will have glittering
decline before many months have passed.
but with the crop outlook good and the
harmony plan in the making II is unsafe
to sell the group short even if II does look
too high.
The story told regarding st. Paul during
the week Is that its fate has been decided
in the Western equation, AS to exactly
the terms of the deal, there is much differ
ence in the gossip. Some people say that
Union Pacific has acquired a very large
block of st. Paul, and that the latter sys-
TEN will be branch Of the Union
Pacific in the future. Others are not so
generous to the Union Pacific, but state
tnat its purchases Of ST. Paul have as
sured a joint control in which Union Pa
cific, Northwest, Northern Pacific, and
possibly Gould interests win all have a
hand. Accompanying these rumors have
been suggestions that the ST. Paul diVi-
dend is 10 be guaranteed at per cent, or 8
per cent by those now in control. and
other rUmors that the Union Pacific diyi-
dend is to be guaranteed at per cent.
The coal stocks look to many careful
people to be excellent purchases on all re-
actions. The conditions in the anthracite
coal trade are superb. The Readings and
Eries all look equal to higher prices
Regarding the outlook for the coal trade
Cossett. Gone d Co. said in their letter
yesterday:
The official estimate of anthracite pro-
ducuon for the late month places the total
at i.654, 600 tons, which, compared with
3,551.Ioo tons for May, 1863 indicates an in
crease of 1,ll7.H7 tons, or 81 per cent. This
great expansion of 100000 tons points to
a yearly output well In excess Of 30, ,O1O, 90,
actually 100000, tons, at the average for
past months, or about 100000 tons more
than the record for 1900. But while the
large amount Of coal mined is an impor-
tant development in the trade, presaging
new record. the consumption demand
and selling conditions are Of equal if not
greater Importance. Readings position is
the most prominent. 1t is the largest
owner of coal lands (Which are a stock
hO!ders asset of incalcuiaDle value, and
but poorly represented in the price of
Reading at presenD, and it mines and
carries the largest percentage Of the out
put. With the trade on better paying
basis than ever, and with prices now ad-
vancing at the rate Of 10 cents per month
back to the March figures TO rule again
during the busy season, Reading cannot
fail to participate to a marked degree in
the Improvement Of the current years in
dicated output Reading, with its 20 per
crease Of only y cents per ton, would show
from this source alone profits augmented
by enough not only TO pay fun dividends
on its first and second preferred stock but
to leave handsome balance fer the COM
mon"
Missouri Pacific is selling at the highest
price for many years and It continues to
advance with apparent disregard of this
fact and OF an absence Of dividends that
has been chronic FOR a decade, more or
less. The stock sold above 124 during the
week and II closed practically at l23 yes
terday. There are not wanting market
people TO assure their friends that II will
reach 150 during the present summer.
Such a remarkable movement is almost
unprecedented in the stock exchange
If the stock should go to $50 il
would entirely eclipse all records. The
basis on which the stock is being doomed
is a two-fold one, the prospect of a divi-
dend, owing to much increased earnings,
and the prospect for an early consumma-
tion of the Greater Missouri Pacific deal
by which friends of the Goulds say this
big family will put the greater part of
their railway holdings into one compact
system with the Missouri Pacific as the
centre. II is probable that much regard
ing both Of these matters will come to
light during the coming week. The di-
rectors Of the Missouri Pacific will hold
their meeting tomorrow and il Is said
will act on the dividend question. They
may take up the consolidation plan as