The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1902-01-20
Plan Pursued in Obtaining $780,
100000 Fresh Capital Freely
Criticised.
LIQUIDATION FOLLOWED MOVE.
Wall Street Awaiting Final Ac-
tion in Northern Securities
Case-Public the Final
Arbitrator.
REPUBLIC SPECIAL.

REPUBLIC SPECIAL
New York, Jan. 1s.-The stock market OF
the week showed no increase in public buy
ing, and appeared to be held largely in re-
preston by the Atchison debenture bond is
sue and uncertainty surrounding the action
of the Supreme Court in the Northern Sc
curities case There is no Disgusting the
fact. despite the highly satisfactory sale
OF the issue. that the method pursued by
the Atchison road in obtaining its O00o. 900
of fresh capital has struck another blow at
confidence 1t is not an unreasonable de-
duction from Well street point of view,
that If a railroad corporation can, without
referring such matters to its shareholders,
saddle property with a note Indebtedness
of S30.0oG.090 for twelve years 1t can do so
for s50.ooo00o or sloo,00oooo additional for
a longer or a shorter period as it sees fit.
Impaired as an Investment.
The investment character of every Atchi-
son issue is seriously impaired, If not de-
stroyed, for conservative buyers by the
Atchisons performance. 1t was not strange
III consequence that liquidation should have
appeared in every issue. from the general
mortgage bonds down to the common stock.
With sinking fund and interest s., ,7O00 600. in
requirements, has been placed ahead of the
adjustment bonds. and the preferred and
common stock, so far as the speculative
feature of the stock is concerned. Atchison
seems to have shot its bolt in that direction
also. Reports of heavy increased earnings
in the past have led to a debenture bond
issue of s3o,00O,000. from which an inference
may be drawn that increased earnings In
the future may not prevent but lead to
repetition of the performance.
Ore Stocks Affected by Rumors.
The. effect of the Atchson issue was OBJ
served in other directions than on the Atchf-
son securities; On mere suggestion that
the Erie road was contemplating bond
or stock issue the shares of that property
declined. though moderate recovery fol-
lowed an official denial of the rumor. Still
the incident showed the public is becoming
more critical to capital issues of the re-
Gently Ieorganized and rehabilitated rail;
issues could be defended and justified more
easily than with Atchison. for the Erie
for years has been struggling under poor
to improve its roadway and equipment to
take advantage of the Pennsylvania coal
acquisition. the developments in the anthra-
requirements. Judged from the experience
of the Atchison. however. the Erie will
nave TO approach the matter automatically.
Bought New York Central Stock.
AZ contrast to the manner in which
the Atchison issue and the Erie rumor were
received the financial community took kind
y to the ss5.00o0oO stock increase of the
was due in part to the fact that the in
crease carries rights of substantial value to
the shareholders. and also to the belief that
the purposes of the issue are more extensive
than as yet announced. Terminal improve
ments alone would not add to the earning
capacity of the property, no matter how
important they are in serving the safety Ct
convenience of the public: nor is 1t con-
ceivable that such an amount of money as
will be realized from the sale of the new
central stock will be necessary for terminal
plans alone. The further purposes of the
company have not been disclosed. One fact
that is made clear is that with all cur
prosperity roads. even the best of them
appear to require large amounts of money.
Public the Final Tribunal.
Whethei a decision favorable to the
Northern Securities Company will provide
the market with its needed stimulus is a
question over which Wall street is divided |
1t is one, after all, which must be decided
by the public. for 1t involves the unloading
on the community of 800 900 of securi- !
ties. or much of that amount as the
promoters choose or are able to sell. In
directly. it probably would revive deals and |
stories of buying for control and the like |
to form new securities companies.
At present the public is singularly apa-
thetic to such rumors and the pools, CliqueS !
and syndicates alone furnish the only ac-
tivity or enthusiasm which is found in Wall |
street.