The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1902-01-19
BOND ISSUES
BY RAILWAYS
$
Reports of Such Proposals Prove
Chilling Factors.
HILLS CONCERNS STOCK
VALUE OF ITS SECURITIES ARE
PRoBLEMATICAL.
HILLS CONCERNS STOCK

H. II.
change today in the conditions upon
which Yesterdays advance from the
prices Of the day before were preicated.
The bank statement, taken as a whole,
was a strong one, and the selling
movement with which it was met was
obviously profit-taking by professional
Traders Yesterdays upward movement
was continued TO some extent this
morning, especially in the coalers and
some Of the industrials, but the later
proht-taking wiped out all the gains
and left several important stocks
point or more lower than last night.
The reduction in the minimum dis
count rate from I to S5z per cent and
the very strong recuperation revealed
by the Bank Of Germany was Confirma-
ton of the weeks indications of the
improved situation in Germany. The
indications are. however. that surplus
capital there is inclined to flow into
home and other government securities,
and no disposition has been manifest
to renew interest in American securi-
ties. A feature Of the days market
was the bidding up of the Chicago.
Burlington g. Quincy unassented stock
to POS, compared with last nights bid
of 19i. No stock came out
American Tobacco unassented stock
sold Is points higher at $50. The
stock market has felt the cumulative
effect this week of various factors
which were in evidence before, but
which were contested by supporting
demand in the market by insiders or
by publications belittling the import
ance in these developments. These ef-
forts to contest a prevailing tendency
were apparently abandoned with the
opening Of the week and depression
and progressive neglect have set in.
The permission granted by the Unit
ed States supreme court on Monday to
the state Of Minnesota 10 appear and
argue its petition for a hearing of its
SUIT to prevent the formation of the
Northern Securities company, cIinched
the likelihood that this great project
IS TO be subjected to litigation that
probably will be prolonged. The value
Of its securities and the question of its
very existence are, therefore. held in
allegiance. The Introduction of securi-
ties TO the market and the efforts for
their distribution have been discount
ed on by spectators as a stimulating
influence in the whole market.
Another chilling influence on specu-
lation was the announcement of new
bond issues by the Atchison and ru-
mers of other issues by the Erie and
Union Pacific The basis of these ru-
mors is the announced intention of
these two companies to make vast out
lays for extensive improvements and
betterments. In the case Of the Erie
there stands the declaration in the last
annual report that 1T would seem the
day is now approaching when arrange
ments for new capital can be profitably
made"
The proposed issue Of SS5. OOO 900 OF
additional stock by the New York Cen
tral comes in the same category of
Influences. The granting of rights OF
subscription to stockholders at 125.
operating as a valuable provision at
the present market price of the stock,
has Kept its quotations up. All through
the recent period of railroad prosperity
much stress was laid upon the large
sums expended out of current net earn
ings for permanent betterments, for
which additional capital would Orui-
narily be looked to. The argument has
been used that these expenditures fore
stau future requirements and make
possible reduction Of expenses in less
prosperous times, and so make for the
stability Of future dividend rates. The
ISSUANCE Of new bonds and stock op-
poses this contention, as il put new
charges ahead of dividends or gives
new stock equal dividend privileges.
The existing car famine is also calcu-
lated to throw doubt upon the suf-
hclency Of the recent outlay for that
purpose. on which such stress has been
laid The apparent squirt at this time
Of the public demand for investment
in securities adds to the effect of these
proposed large new offerings. So do
the developments in the affairs of the
trolley syndicate, the rubber trade and
the asphalt trust The theory that
abundant capital is awaiting a favor
able turn of affairs TO flow into Wall
streets securities has to contend with
the disclosures that enormous sums
have been ventured in these projects.
whose securities have been almost IN
known IN the stock market
1t Is an important question how far
this investment of large capital in
great projects outside Of the stock
market has proceeded, how far bank
ing resources have been committed to
these projects, and how far difficulties
OF realizing on them may develop as
they have done in the cases already
disclosed. Those considerations have
caused an undertone Of conservatism
and some uneasiness in the financial
world which the favorable reports of
business and trade have not entirely
aileviated. The future course of rail-
road earnings Is earnestly studied
Latest reports show satisfactory re-
turns, but reports are renewed of rate
cutting. in spite Of the complaints of
lack Of cars TO carry all the business
offering. The easier money conditions
have failed TO stimulate speculation.
The rush to retire bank note circula-
ton. Is a symptom that the con-
slant expansion of the circulation.
which was a feature of last years
conditions, is not to be repeated this
year. Applications are reported al
ready on file in Washington for the
withdrawal of bonds and the retire
ment of circulation UP to the full legal
limit for this month, for February and
for part Of March quota
Foreign money markets have become
abundantly supplied with the turn of
the year, but are not expected to re-
main so. The issuance of a German
and a Prussian loan this week is to be
supplemented in the near future by the
new British loan and by d large Rus
sian loan at Paris. The London money
market is expected to reflect the heavy
payments for taxes for the quarter
from the middle Of the month onward.
The stock market has become dull and
sluggish under these influences and the
only speculation of importance has
been in stocks affected by individual
causes
Bond dealers have complained that
the investment demand for bonds was
not as large as usual for this period