New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-05-24
Financial.
The Financial World.

4
the Humiliation IN this is the most talked Of and
the most speculated about. Also. II may be
added il has had a more de-noralizing effect on
the list than any other one thing. When TIE
market had it's sharp rally on Thursday. IL was
the fresh outburst Of selling IN ST. Paul On Fri
day which checked further forward move
ment. Vshen il became apparent that tEs rally
had exhausted its force. st. Paul ted the way
downward: and yesterday It had got back even
lower than before. TIE lowest before the rally
being 1924 while yesterday Il was lJl
The persistent selling OF the stock was referred
to in last weeks article: and Il was suggested
as a possible cause that the Board Of Directors
or the more conservative element thereof, might
be doubtful as to the expediency Of continuing
the dividend at the rate Of per cent. Nothing
one way or the other. has been heard on this
point In the old times the St. Paul manage
rnent has been known to sell new issues OF stock
In advance OF a formal announcement Of the
same: but in these days. such methods ara not
considered respectable So this idea must be
dismissed. Are the Standard on interests IN
the stock being Hquidated. in view OF troubles
ahead? This is guessing. But the Street gen
orally is guessing and was guessing very
earnestly yesterday when the whole market was
more or less demoraIized by the way St. Paul
was sold down.
It was on Wednesday that the market got its
first hard knock, and the bear party appeared
to have everything its own way. This meant
that a covering movement would Immediately
follow. which it did the next day. After the
morning orders from out of town had been dis
posed of (being generally orders to sell because
OF impaired rnargins). the whole list advanced
The close was very strong. indicating continu-
ance Of the rally Friday. Pennsylvania had led
the upward movement. on the semi-offcial an
nouncement that the new issue Of Pennsylvania
stock had been underwritten BY two Of the lead
ing banking houses But the next day tha
PAPERS were filed with descriptions Of the way
the Pennsylvania Company was smashing the
Western Unions property along It's lines: which
operated as a cold douche. 1t was fortunate
this news did not come on wednesday. when
the whole market was falling II IT had. there
would certainly have been something Iks q
smash.
The Street is now divided in opinion as to
which Will carry the most speculative weight-the
banking combination to finance the new issue OF
Pennsylvania stock. or the open and violent an
tagonism between TIE Pennsylvania and Could
Rockefeller interests. Everybody knows, OF
course that this is not a telegraph, but rail-
road fight. Mr.. George Gould. backed BY Mr.
John Rockefeller has pushed his railroad
schemes into the heart Of Pennsylvania terri
tory, coming into Pittsburg and preparing TO
wabash system from the West 70 tide
water. The occurrences OF the past week have
demonstrated to the world how deeply this in
vasion is resented By the Pennsylvania people;
and undoubtedly Mr.. Cassatt's orders for the
wholesale destruction OF Western Union prop
erty were in entire accord with the feelings Of
the Board OF Directors OF the Pennsylvania Com
pany.
1t is not the first time Mr.. Cassatt and Mr.
Rockefeller have come into collision; and when
they have before there has been a rough house
in the immediate surroundings Of the fight
They have never. however. had railroad fight:
and the consequences Of the present conflict.
which is on a larger scale than any previous
one. are likely to be unpleasant. In so far as 1t
has already operated in the stock narket-and
lust how far only those most Immediately en-
gagged have knowledge-it has been decidedly
discomforting.
1t Is noteworthy that the Pennsylvania people
make no bones Of DECLARING to all the world
what sort OF fight they are ready 10 make, Just
at a time when 1t would seem that their schemes
Of large capital creation required that the specU-
lative and investing public should be saved from
any such shock as this conflict would be certain
TO give It Is not easy to understand this. IN
less on the theory that the general indifference
TO stock market considerations which Is char
acteristic of the Pennsylvania ranagement-an
Indifference born Of success-has IN this instance
been carried to extremes.
MI Cassatt was forced to recognition Of the
stock market IN respect 70 the new stock issue
He took action before It was too late. II had
become almost denonstrable that the issue
would be a failure. From the day It was an
nourced. people most friendly TO the property
expressed the opinion that II was a mistake
simply because it asking the public to take
too much. It was overtazing the absorbent
power OF the investor. AS the price Of the Cd
stock continued to fall. was predicted %
would the outlook for success became more
dubious When the price got down 70 only
about five points above the subscription price
while the market was falling all round II. I'm
mediate action became necessary II the company
was to get the money It irnperatively needed
The bankers were appealed TO. and the forrna-
ton of an underwriting syndicate. TO take al
stock not subscribed for otherwise. was at once
entered upon. This assures the Pennsylvania OF
its money It puts it easy street This Is
done at a cost In commissions OF only "a ger
cent on the cash value OF the stock so under
writtsn-in other words. 81 per cent on 81
millions This is cheap Insurance. II Is small
price to pay for averting the consequences Of
serious financial miscalculation. II the new
issue had been a failure. as II threatened 20 BE-
the Pennsylvania would have been seriously
tangled up with the rash and costly works it has
on hand and lack OF money to pay for them
Under such conditions. the ultimate direct ard
indirect cost TO the company would probably
surance commission.
Furthermore, the failure Of the subscription
would have had the worst kind OF effect on the
a an paV,gy IL