The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-11-15
Chicago q Alton Showed a Few Points
of Strength Based on Absorption
Rumors by Larger System.
BANK STATEMENT FAVORABLE
HEAVY SELLING MOVEMENT OF
PENNSYLVANIA SET IN,
Which Cost that stock the Greater
Part of the Gains 1t Made the
Previous Day.

NEW YORK, Nov 14-Trading in to-
| days stock market was listless and mar
row. Operations were on too small scale
to offer anything of a representative char
acter. There were few points of strength.
including Chicago Alton on a revival of
rumors of its possible absorption as a con-
Meeting link in larger system. Southern
Railway advanced in response to rather
vague assertions that the Seaboard Air
line was in a way to be brought into the
Southern community of interest. The up
ward movement of Manhattan continued
on the score of the increase in earning
power through electric operation, as re-
| vealed by the last statement.
One or two minor stocks rose without
explanation. The market as a whole
| failed to show a continuation of yester-
days movement to cover shorts and prices
drafted rather aimlessly. The bank state
| ment proved decidedly more favorable than
the forecast had indicated, but nevertheless
it's publication was followed by a brisk
selling movement, which conferred upon
Pennsylvania, costing that stock the
and Amalgamated Copper also lost more
than point, and the whole list receded
TO below last night. The decline in the
| cash reserves of the banks proved to be
only S2,9l3,200 Yesterdays estimates indi-
| Gated an out-go for the week of 100000
without allowance for yesterdays arrival
| ST. 100000. The deposit liabilities of the
| banks have been reduced by S14 629, 600, prin-
cipally through the loan contraction of
| &c. 800 The reserve requirement is thus
| diminished to the amount of 1865, 400. leav-
| ing an increase in the surplus of 1920
With the falling off of the movement Of
currency to the interior which has
| CURED, and the supply of foreign gold
af1oat for this port, the money market pros
easiness. without counting the likelihood
of q considerable further movement Of gold
this way.
RESISTED FOR A TIME.
| The market closed dull and heavy. Enor-
nous selling of the United States Steel
curities, followed by selling of a similar
character of Pennsylvania, has disturbed
| the stock market during the week The
| sympathetic effect of the weakness of these
stocks was resisted for a time, and the
| general market showed a degree of firm
ness, but ultimately succumbed and yielded
| to lower level. The source and the mo-
| tives of the. selling have been subjects
of wide conjecture, much Of which appeared
in the form of assertion of facts that could
| not be verified. The diligent activity Of
| a large and well-organized bear party &C
| counted for some of the rumors set afloat,
| and large part of the dealings in the most
prominent stocks was evidently for profess
1 SlOndl account III Tie OI tTdufuS III
and out for short turns on the movement
| without affecting the actual holdings OF
stock permanently. But the success attend
ing these professional operations and the
steady downward course of prices pointed to
| process of actual liquidation and Of i'm
peling causes for 1t, which undermined
speculative confidence and weakened the
| whole market The course of the United
! States Steel stocks had for the most obvious
explanation the depressed condition Of the
iron and steel trades, now freely acknowl-
| edged.
The professional leaders of the campaign
against these securities apparently fixed for
an objective the price of 81 for the preferred
and 10 for the common. and those points
were touched by both stocks and overrun
by Il by the preferred Large covering of
short contracts then followed. and rallied
both stocks. The covering movement was
encouraged by the formal announcement of
the decision to cut prices no further than
| had been done in contradiction to numerous
runorS in persistent circulation. But Senti-
ment over the further developments in this
| important index trade is still much unset
| tied and doubtful The effect upon
sumptive demand on the new basis Of prices
| is awaited. Continued discussion of plans
of economy by reduction of wages outlay
| and salaries In the executive departments,
and agitation for reduction Of freight rates
| on iron and steel products are accepted as
| indications Of further contraction in the
| trade.
RESTRAINT HAD NO EFFECT.
The developments have indicated the
ton as device for maintaining stability
| in the trade, as had been hoped for it at
it's formation. The restraint which the cor
| poration had been able to exercise upon the
rise in prices during the period of active
| demand was proved Intellectual to conserve
| that demand and the present cuts in prices
| point to the necessity of old methods to
stimulate demand afresh. The result has
| been to arouse fears that former precedents
of an interval of extreme depression in the
trade must be faced. Greater confidence is
| not felt in the power to restrict production
and prevent the Improbable accumulation
| of stocks.
| But the effect of this process upon earn
| ing power and dividend payments Is dreaded.
| Account must also be taken of the effect
| conversion syndicate 1t is made occasion
| for criticism that while this syndicate is
under contract with the corporation at an
| agreed compensation Of 4 per cent. on the
| par value of preferred stock converted the
heavy decline in prices of the corporations
preferred stock is made by force of circum-
| stances to increase the profit on the syndi-
| Gates operations. On Tuesday of this week,
when United States Steel preferred touched
1874 the low price for the second-mortgage
bonds was 65, thus offering a margin of
| l5A points of profit on the conversion Of
preferred stock into bonds, besides the
per cent commission to the syndicate. The
syndicate a large buyer of the pre-
ferred stock on Tuesday and this helped to
| rally the price. No authoritative informa-
| ton can be had as TO the syndicate opera
tons remaining to complete the conversion
of the available stock. The depression in
the iron and steel trade had a direct bearing
on the movement in Pennsylvania, owing to
the large tonnage of iron and steel products
carried by that road. The falling off in the
coal trade by both anthracite and bitumin-
GUS was also offered as ~ factor in Pennsyl-
| vania's weakness But the principal cause
of the selling of this stock was believed TO
| be the large expansion in the capital Of the
| system which is in progress.
SUBSIDIARY COMPANIES.
| The increase i'm the capital stock Of the
company itself of s75.oOo.oOo par value
| lier in the year has been followed in the
| last few weeks by the issue of upwards of
| $50, 100000 bonds and stocks by subsidiary
companies of the system. The increase in
| earning requirements for fixed charges and
TO maintain persent dividend rates thus
comes into consideration. The proposed
outlay of large sums of this capital for
doing away with grade crossings and for
terminals. is the subject of estimates as to
| the increased earning power of such i'm
provements. Ii is probable also that part
of the liquidation in the company's stock
| is to provide resources for taking up the
new bond issues. 1t Is intimatcd that large
foreign authorizations have heen pnade m