The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-06-30
FINANCIAL AND COMMERCIAL
MONDAY, June 20.


notable SUCCESS Of the Pennsylvania Rail
road s new stock issue. To this was added
another factor which peculiarly impressed
sentiment in the banking world. that the
money market was not disturbed by the
transaction. although everybody had ex-
pected that IL would be. 1t must be said
that the achievement Of the syndicate
underwriting the Pennsylvania issue is one
that reflects the very highest credit on its
managers aside from it's value as bringing
abundant testimony az to the intrinsic
strength of the financial situation. Wall
Streets memory is short, but there surely
cannot pass from 1t the thought OF the con-
dition Of affairs at the time the syndicate
was formed. At that time the existing
plan of the Pennsylvania management was
a failure. 1t was perfectly obvious that
the shareholders of the company would
not subscribe to the new stock at l2O. not
that they thought the price was too high
or that they had lost faith in the Pennsyl-
vania property but that their general
financial confidence was shaken. A down.
ward movement was in progress in the
stock market that was assuming very large
proporti ons and the market was. in plain
words, on the verge OF panic.
That that panic. or at least extreme
decentralization, would have occurred
il the Pennsylvania stock subscription
had failed there is little reason to
doubt The Pennsylvania company could
not have repaid at the expected time the
loans that it had contracted in anticipation
of the receipts Of the proceeds Of its stock
issue. It would have been forced to call
halt on a considerable portion, at least.
of its plans of improvement and construc-
ton. Other companies would have halted
likewise the new work that they had under
way. and all this would have reacted sud-
denly and disastrously upon the great
corporations engaged in the iron and steel
business and in other lines of production
and manufacture. At this moment the
Pennsylvania syndicate stepped in. Its
members agreed to take all the stock at
the stipulated price IL the stockholders
did not To do this required courage,
sagacity and, it may be added. the pos
session OF financial resources that are not
altogether common in Wall Street. But
when the Pennsylvania shareholders Jaw
that the great banking interests Of the
country we're willing to take the stock they
concluded that they were willing to take
it, too. 1t was announced in Philadelphia
to-day that the entire issue had been sub
scribed for by the stockholders and that
nearly Ss6, oOo. 900 of the $50, COCOON required
to be paid in had already been turned over
to the company. All this. OF course has
long been foregone conclusion. and public
confidence has been gradually restored
thereby 1t has been evide mt for two weeks
that the security market has been prese Mt
ing very strong resistance to all the EFFORTS
made to break it. Buyers were not "bid-
ding" for stocks and enthusiastically fol-
lowing every upward squirt in the market.
but they were clearly convinced that good
stocks were cheap and that on all the weak
days the shrewd thing for them to do was to
open their pocket books and buy securities
1t must also be admitted that 30 far as
to days market was concerned, 1t was
purely professional. Close observers de-
clared that they saw some evidence of the
phenomenon usually visible at this time,
namely, an Investment in anticipation Of
the receipt of money on account Of interest
and dividend payments due tomorrow.
These payments will. it is estimated, foot
up $l36, 1000. Nevertheless. to-day's
movement was clearly speculative. based
upon the conviction of the larger operators
that prices had not yet discounted the
general change in the public temper caused
by the events hitherto noted The days
developments we're generally favorable
London houses bought between 10000 and
so 900 shares of stock here, and trust wort nv
advices from London were that easy money
was expected there over the half yearly
The grain markets were weak on reports
of needed rains in the spring wheat region.
although at the close the next crop options
in wheat we're as high as they were on Satur-
day The price of corn also rose. Cotton
prices we're little, but not very greatly,
lower. and signs that the dangerous corner
in the commodity is unbroken are still
wanting. The hard coal stocks in the Sc
curity market were especially strong during
the day on renewed reports, this time of a
semi-authoritative nature, that the Reading
Railway for May will show a surplus over
charges Of 81 300, 900 and an increase over
the earnings of May Of last year Of nearly
81, 100000.
Taking broad view of the market, how
ever, it cannot be said that fundamental
conditions have changed from those Of a
week ago. Until they do it is difficult
to see how any large advance in stock mar
ket prices can be maintained. For one
thing, and that is enough. there is still un.
certainty about the crops. Another matter
ia that the full returns Of the Comptroller
OF the Currency of the condition OF the
national banks on June q, now available.
make an even less fattering showing than
the fragmentary reports of the condition,
as they have been printed from time to
time, have led people to believe. Bank
loans, ii seems, are now over $l93 ,OOO, 900
more than they were last July and have
increased nearly $l2 ,o0O,o 900 since April
o, while cash reserves are 81 500 900 less
than they we're at this time last year. II
lis the belief of many wise bankers that the
month OF July will see a perpendicular
cutting down Of bank loans due to the re-
payment by the Pennsylvania company
Of the money borrowed by it and to
similar liquidation of corporate Indebtedness
elsewhere. 1t will be interesting to see
how far these hopes are realized "A great
bull market" while the condition OF the
banks remains az at present would OBJ
viously be not unlike that Of last summer
and would probably meet the same fate.
The larger needs OF general business, the
transfer of loans from the other side of the