New-York tribune., 1901-05-05
Gnaurial.
The Financial World.

d
from highest quotations varying from two to ter
points 1t was said that the banks becoming
alarmed at the wild pace Of speculation, had re-
stricted loans. 1t is certain money rose to per
cent though the average rate for the day was
about 6. Money is the bride by which the pace
of bull speculation is checked. and there will be
some severe tugs en- it between now and the
fall. Besides the higher rate for money there
were other. but temporary causes. for the sud-
den drop. Yesterday the market. under the lead
Of st. Paul. began to rally again.
1t is worth while 10 stop for a moment and
take bearings on this market We shall see
that, outside the unprecedented expansion of tha
trade of the country, there have come one on
the heels Of the other. a series of events which
are effecting readjustment of practically two
thirds Of the rational railroad system. The first
start was made by the New York Central when
il formally absorbed the Lake Shore and agreed
with the Pennsylvania as 70 what tributary
roads to the two systems each should have
Then came the purchase Of the Baltimore & Ohio
by the Pennsylvania. and the taking over Of
the Norfolk and Western and Chesapeake &
Ohio. With the various transfers of control the
situation was that there We're only three sys-
TENS between the Atlantic seaboard and the
Mississippi-the Central. the Pennsylvania and
the Erie
These changes caused some considerable ad-
vances in the market prices of the securities but
nothing as compared with what was to follow.
For ii happened about this time that Mr.
Huntington died. His death opened the way
to extend the system OF unifcation from the
Mississippi to the Pacific coast. This unifca-
ton is proceeding. and in it will be found
the special moving force which has caused the
violent advances IN so many leading stocks.
whose upward surge has swept along ali smaller
things.
The final outcome will be this: from the At
lantic to the Pacific there viii be three great
systems-the Erie. Burlington. Northern Pacific
Great Northern line; the New York Central. ST.
Paul-Northwest and Union Pacific line; the
Pennsylvania and Atchison line.
We have still 10 consider what place among
these systems the Missouri Pacific will occupy
and what will be the affiliations of the Rock
Island. This has not yet developed, but the de-
velOpment cannot be far away.
1t is not to be supposed that all these far
reaching plans were laid out at one sitting Of
great bankers and railroad men. They have
grown one Upon the other. one big move shg-
gestlng and opening the way 10 the succeeding
one
There is reason TO suppose. however. that an
alliance Of the St. Paul and Northwest with the
Union Pacific was in contemplation by certain
other interests. when Mr.. Morgan made his
proposition TO purchase ST. Paul; and that IL
was these interests which. from the background.
influenced the rejection Of his proposals. thereby
causing the proposers TO turn TO the Burlington
While general view Of the situation may be
obtained from this standpoint. are left IN
considerable mystifCaton to the cause Of
the competitive buying which started in Union
Pacific about two weeks ago. TO whose fury the
wilder phases OF the market the past week must
be set down. 1t appeared to be a contest for
control-in fact. it is virtually conceded by prin-
cipaI parties In interest that ii was. II is also
conceded now on all sides that the present man
agement will remain in possession.
But who started 10 get the control away from
the present management. and what was their
purpose IN II? 1t said TO have been started
In behalf Of important minority holders OF
Southern Pacific. That appeared to be the case
a week or ago. but IL looks less like 1t now.
1t was also said TO have been done by the Van
derbiIts. But the Union Pacific has been re-
sarded Vanderbilt property from the day
of It's reorganization. Outsiders can only guess.
putting this and that together. that there were
two factions among the big insiders. and that
the one which was not dominant In the COM
pany set out 10 become so. and that the other
took alarm. Hence the competitive buying
which carried the stock up so furiously
This is all conjecture. and may be right or all
wrong. 1t goes without saying that at times
there are questions which one cannot ask at the
usual sources OF information. and 20 which
answer would be vouchsafed il one were foolish
enough TO ask them However. 1t may be said
that while. IL there was a contest for control one
party must have been beaten and the other VIC
torious. 1t is quite noticeable that everybody
seems at present to be perfectly satisfed-not
only satisfied. but pleased. OF course, the usual
remark would be that they compromised. II
this be soon what did they compromise? Il
needs only TO add. that when 1t was predicted
Union Pacific would sell as high as Burlington
Burlington was selling at no Nothing that has
happened invalidates that prediction. Union
Pacific is earning about 94s on it's stock.
In yesterdays market the rally was led by ST.
Paul. The buying of the stock has been OF the
best. 1t is done In pursuance OF the general
plan of transit Mississippi unification Incident
ally 1t may be noted that large short interest
has been caught in the stock. which makes il
loan at premium. Such trihes do not count in
these days. when we are dealing with leviathan
forces. but the fact is worth noting. 1t rather
looks as if this short interest would have a bad
time
When the market was at it's widest Atchison
common. after it's dividend declaration at the
rate of per cent forged upward until it touched
90. This was coming Il rather strong. and in
the subsequent break of the market the stock
took a header of eight or nine points When
speculation gets very rampant. headers must be
expected. But AtchisOn is all right II will
sell at 90 again. but ii ought to take its time
about it, The preferred crossed par the
buying of only 2.IO0 shares. II had held
long between 90 and 907s that the bulk Of the
stock awaiting sale around par had been alb
sorbed- After crossing par an advance OF four