New-York tribune., 1901-05-26
financial.
The Financial World.


expected to act 1t has been settling down after
the recent CONFUSION. with great dininution IN
the volume of trading, and speculation gett,n1
into rational mood Instead OF the whols la,
being carried up or down by common inpuls.
stocks have moved individually. which give.
the list appearance of irregularity This 4,
as it should be. General conditions are favor
able for rising market but the uncertain "a.
tor, and most important one. is the temper q,
the public. The public has been hurt and i. has
been frightened. 1t has been frightened eva,
more than it has been hurt. With the public .,
suspicious or doubtful frame of mind. big rail-
road earnings no longer have the exhiIaratfpr
effect they had; and rumors of new consolida-
tions combinations create uneasiness in plaza
of confidence.
While the railroad and the general trade stu.
alton is every way good. the speculative situa-.
ton is full of complexities. 1t has been long
while since Wall Street saw such vast amounts
Of securities blocked up as they now are; If, in
deed. it ever saw it, Take the latest and most
conspicuous exampIe-the Northern Pacific OF
It's SSO.OOOo 600 of common stock. the outside pub
lie owns only an AAc NOME
and foreign markets have been swept bare
Sales of only 1 400 shares on Thursday suficed
to raise the price A. points from 160 to 205--
the first named figure being as purely an arti-
fetal price as the last. 1t has been claimed that
the advance that morning was hctitious-made
to affect the general list. Whether ii was
was not the fact remains that there were only
small scattered lots of the SsO,ooOOOO Of stock
loose Since Thursday there have been no trans
actions in 1t at all.
There are SI50O0000 Of Northern Pacific pre-
ferred Though this is still free enough in
amount to permit a limited trading in 1t at
sonable figures yet it is we'll known that a large
proportion of the total amount has also been
locked up having been acquired by the Union
Pacific interests to round out their holdings Of
the common. Probably the holdings Of both
parties to the contest for control aggregate over
cne half of the S750OO.OO0. Here then We have
total of about s11S.OOO.OoO OF stock OF one
company tied up closely. out Of the market. and
held under lock and key. it were. by two sets
of capitalists
The stock of the Great Northern Company Is
so closely held. that purchase OF control OF that
property in the open market was known to be
impossible by the Union Pacific directors. when
they were considering what action they should
take in view OF the purchase of the Burlington
by Mr. HILL
The latter purchase only effected by gath
ering into few hands what had previously been
scattered among the investing public. and scat
tered in an unusual degree Burlington stock
disappears from the list; but the bonds into
which it is now being converted must be blocked
UP with the people who gathered in the stock
The extent 10 which Union Pacific IS blocked
up is made doubtful by the events of the past
few weeks Probably the preferred stock IS dis
persed. the process OF dispersion having been
steadily proceeding since the property was taken
from Government control The common stock
must have been largely concentrated up 70 the
time when the price approached So There was
then. judging by market movements a consf1-
erable dispersion of IL. Soon after this cane
the purchase OF the Southern Pacific and grow
ing out of this and the Northern Pacific matter
a rapid and large repurchase made. in
which the price Of the stock rushed Up TO
I3S. How much of this has again been sold Is
doubtful.
There are. however. the convertible bonds
the first issue 80 millions the second SO millions
The first issue took OF the market and put
into the u p treasury, T5 millions of Southern
Pacific stock The second issue will go To pay
for the Northern Pacific stock These co mill
ions Of bonds. convertible into stock at any time
must at this time be blocked up; because. when
the L. p. directors authorized the purchase OF
the Northern Pacific two things must have gone
with it: Cd authorization OF the raising OF
funds TO pey for the purchase: CD arrangements
with some to take the securities on which
the money to he raised
Since 1t was necessary above all things 20
keep the matter as secret as possibIe-as other
wise the purchase could not have been made
1t follows that those who furnished the money
must have been men within the inner circle:
who. of course. would be few in number. and
probably directors. This group Of capitalists
are now carrying the bonds in block
III we turn now from the above group OF prop
critics. and look in another direction we find the
stock OF the Missouri Pacific Company 70 have
been gathered in from the public and 10 have
become concentrated in the hands OF another set
or capitalists 1t sUffices point TO the present
price Of this non-dividend paying stock to prove
the assertion. even if no other evidence were
available The same people have gathered IN
Texas Pacific. the Denver and Rio Grande
and are doing the same with the Wabash-where
they began with the debenture bonds Mr.. Sage
who recently was alarmed at consultations
now talks about Missouri Pacific system
tending from ocean to ocean.
The enumeration OF the above roads and sys-
TENS. will indicate to any one the truth OF the
statement first made-that Wall Street never
before saw the blocking up of securities in the
hands of a comparatively few men carried 20
the extent TO which il is now. This. already
said. makes the speculative situation full OF
complexities. and affords food for much thought
as TO how ii will all work out.
Among the Eastern roads Erie still engages
most attention and will continue to do So II Is
the one road in this section whose future Is
still with sDecuIatfva nosSibiItffeS while