The Washington times., 1902-12-18
MARKET NOTABLY
STRONG AND ACTIVE
THE FINANCIAL WORLD.

THE FINANCIAL WORLD.
While the market is very sensitive.
there IS every indication that prices will
remain firm. with a strong tendency to
advance. Money is now returning to
New York-the tide In that respect hav-
ing turned last week-and the prospect
FOR a favorable bank statement on Sat
urdav Is excellent.
Il is stated the bankers pool" has
not been called upon TO lend any part Of
the $4,000. 600 subscribed. and if this be
true il is striking evidence Of the faith
the financial world has in the judgment
Of MIR. Morgan and his colleagues in this
undertaking. II was only necessary for
them TO announce their readiness to act
to restore confidence. check falling
prizes. ard materially lower the rate Of
interest on call loans.
It is not generally taken into consid-
Grafton by the public at large that the
loan account Of the New York banks. as
published every Saturday. include the
stocks and bonds owned outright by the
banks. and which as a matter OF fact
represent the surplus earned by them.
These holdings are large enough "a
sway the market either one way or an
other. and when any leading banker
states authoritatively that stocks are
high enough # can be depended upon
that the banks are selling out their Sc
| curities for the purpose Of buying them
back al lower prices.
Southern Pacific is gaining an activity
which its value warrants, and back OF
which is a strong speculative pool which
I is guided by an operator Of great skill
and known ability. From authentic
! sources II is learned that the pool has
acquired 800. 600 shares during the past
nine months, and that IN the break
/ from so to SO. which was the low
point. the pool had not. by direction
/ Of its managers. sold a single share OF
stock. II is reported. however. that
some Of the individual members OF the
I pool hedged their holdings by going
short Of the stock at higher prices. and
some OF them even sold their certificates
outright. When the day OF reckoning
comes these certificates must be return
! ed. and as the manager required. as
condition upon entering the pool. that
the certificates as numbered should be
ready for delivery when called. those
persons who have sold out on their
colleagues may have difficulty in buying
back the certificates.
The net earning capacity Of Southern
Pacific for the current hsca, year is
estimated at fifteen millions over dxed
charges. which means that the stock
is earning between and per cent
at par. and II per cent at the present
market price. Heretofore the earnings
have been applied to improvements. but
there is a strong movement on foot to
give the stockholders the benefit OF
the earnings. and to provide for i'm
provements by issuing bonds, which is
the policy OF the Pennsylvania. New
York Central and other railroads.
The question OF rate cutting. involved
in the beef trust injunction proceedings
before Judge Grosscup in Chicago. has
never been so near a settlement as at
the present time. In the past roads have
entered into costly strifes in this respect
with the result always following that
the antagonists have lost money aud
prestige. The case at issue which has
been argued this week is. that one OF the
roads running from Kansas City TO Chi
cago. gave rate far below its publish
ed rate. to a firm OF New York packers
uopn the condition that all OF the firms e
traffic should be carried over that road
This fact was acknowledged ny the rail-
road. and IN justification OF its action. il
was stated that other competing roads
did likewise. and that Il was the only
way it could obtain its fair proportion
OF the traffic For instance. Il brought
into Kansas City a larger percentage o.
cattle on the hoof than any other road
but It's traffic east from that point was
ridiculously small b. reason Of the fact
that it made no rebate from the pub
lished rates. while the other roads did
Il is true in prosperous periods freight
traffic Is heavy. and all roads are con
gested, more or less; but should Il be-
come compulsory for the roads 10 main
tain their printed published rates they
would earn money in poor years as well
as In good ones.
One Of the arguments I'm favor Of the
community OF interest idea was that the
railroads thus brought into closer rela-
tions would maintain fixed rates. But
there IS always temptation for trahio
managers To give concessions in order
TO secure business. and invariably those
who profit by the cut can best afford to