New-York tribune., 1902-02-16
financial.
The Financial World.

followed, the same as that or the previous vaat
by a rally in prices after momentary dron''
and the market came to a firm close II \, :.
be noted that though the surplus reserve ~
been decreasing for three weeks and the lo.-1
running up. yet the banks seem so full OF mora.
that they actually press it upon borrower. :.
very low rates. and conservative bankers a..
that showing made by the bank Statement. a
more or less an affair of bookkeeping ,vb,,,-
would be speedily changed again by a rise -
interest rates
The weeks operations in the market sfa-.ss
off with some exceedingly lively trading IN t,s
Reading issues. upon which there is a vs-,-
buliish feeling because of the prosperous conai-
tion of the coal trade. In subsequent ouara-
tions, Reading second preferred had the r,o-
pronounced advance; and il was asserted tha.
in August next (the earliest date at which ;,
could be done) this stock would be converted =,
accordance with its terms Of issue, into ons-
half first preferred and one-haIf common NJ
Morgan is said to have great ideas OF the futura
of the Reading property, that the owner
ship of the anthracite coal fields has become
concentrated; and TO predict that Reading com
mon stock viii became a second Lackawanna
After the early movements in the READINGS
had given some liveliness to the market South
ern Pacific took up the running. and on bis
transactions. such as are common TO this stock
-
671a. 1t did not at any later time, go above this
figure; but usually maintained itself pretty close
to it. running of little when the market has
set back later in the week. but coming back
again quickly on the rally. The conditions AZ,
fecting this stock. in respect TO its market
movements, were set forth at some length last
week. and nothing new has developed in tha
interval
On Thursday morning. after the holiday the
market opened under the weight OF the 3
It's announcement that it proposed to make
trfling bond issue of 80 millions When issues
Of less than half this figure are contemplated. ii
has usually been the custom to previously take
into consultation leading banking interests
The Brooklyn directors seem to have omitted
this formality. So far as appears. banking pec-
pie were much taken by surprise as any,
body The directors may have thought that as
they needed only four TO five millions right
away, 1t was not necessary to finance the issue.
But at what price is IL expected to sell this
latest issue OF per cent bonds when per
cent bonds OF the Brooklyn's subsidiary COM
pany are offered, as they were yesterday. ar S07
Such bonds as those proposed in the directors
announcement could be sold only az heavy
discount and IT Is difficult 70 see how the com
pany would be benefited by raising money az
such cost, unless il is desperately in need Of
1t, which does not seem to be the case. Take
this fact. the fact that the announcement OF
the issue was sudden, and the rumors "rEat
perhaps no bonds will be issued at aIr'; and we
have a curious combination 1t is certainly ore
Of the most surprising financial schemes which
has been sprung on the Street in a long while
an opinion which is shared in banking circles
One Of its effects was TO intensity the critical
temper in which the public quite evidently had
been prepared to receive the new financial
scheme Of the Metropolitan company. When ir
did come out, the traders forthwith jumped on
Metropolitan stock and drove it down two or
three points; but this attack was soon driven on
and the price put higher than before or tnls
scheme, IL may be said il gives the Metropon-
tan Company % millions OF new money withou-
increasing the volume Of Metropolitan stoez
proper The latter Through the guaranteed IS
converted into sort OF preferred stock. entitled
TO per cent.
The Metropolitan Securities Company. which
Through an intermediate legal hction) leases
the Metropolitan railway property. viii get
everything over the per cent paid out on its
guarantee. 1t pays over the 23 millions to the
Metropolitan Its subscribed capital is so mill
ions. and rights of subscription are offered to
Metropolitan stockholders to the extent Of q
per cent OF the so millions. the other y per
cent having been taken by a syndicate. Tn9
issue is underwritten.
PURPOSES Of the scheme are-to supply neeced
money to the Metropolitan without increasns
its stock: stockholders who are content Win q
per cent can remain In the company WINE
those who are ready TO speculate sonethns
more can go into the Securities stock Tns
Securities stock. it will be observed is TO DC 'a
speculative factor; while Metropolitan STOCK
proper presumably takes the quleter poSl'i'" -
a stock with a fixed dividend
the analVsiS IL De sdtA
that the railway property is now represen's''
bv a preferred ana common stock: MetropeAla'
stock being the preferred. and MetropoIldn
Securities stock tie common
1t should be added, that above and oeyon''
the matters mentioned, the Metropolitan Oo.i
panv will make a refunding mortgage WHICH
will give II a margin Of S11 100000 over exist
ing issues.
Meantime. the Manhattan Company IS ao1e
make an excellent report for the quarter an
half year. showing a substantial increase -
earnings and number Of passengers carried o''-
the previous period
Outside OF the traction affairs. there was hO.H
ing much through the week to engage speelat
attention. and the market was generally Gui-'
strong with such stocks as ST. Paul Pennsf.
vania, New York Central Southern RaLroau'
the Eries. the Missouri Pacific mainly to sn7
front. Special strength was noted IN the sou.
western Gould stocks the buying OF Texas
cific being quite large. 1t has something 70 ~
it is understood. with new arrangements
progress for the working Of the Texas rO1-
In the industrials. the steel stocks main'aiA
their customary position. which discourases
speculative trading in them; and this may
Mr. Morgan's purpose. They swing Win ~
general market within narrow range OF ! y
H. per cent. up or down, as the current mo'e
As to the condition Of the steel trade,-tHele =
- ---. - q. -rha ors question is how