The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-03-30


rbsr, are pssnty Of wsys now In which
ready money can b used 70 exeeeoms
advantage. Reference has often oeen
made In this column. especially In the iass
two years, to the fact that many Very
wealthy and very wise investors nave
steadily declined to admit throughout an
the present period Of prosperity that. WIN
perhaps one or two exceptions, unguafan-
teed common stocks OF railway companies
In this country should sell at higher prices
than those which would net purchaser
return Of per cent. ON their money Inc
basis Of their contention has been that with
gilt edged railway bonds yielding 81 or ~
per cent. and with good railway bonds
yielding from TO 81 per cent. common
shares Of railway companies ought 10
yield at least s per cent. considering the
mutations Of financial Affairs here and the
adversities to which our business 10 subject.
Such estimates. too. only include the older
and well-known railway stocks and quite
leave out Of confederation tho new shares
Of reorganized companies. In the view
OF these critics, railway shares Of this latter
class, which only Rfew year, ago were sell
ing for less than the assessments paid In
upon them. but now. owing TO extraordinary
earnings and TO speculative operations. OF
one SORT and another. have increased in
quoted value rs and 100 per cent, should be
considered of the same sort exactly as in
dustrials; and it must be confessed that the
spectacle OF these stocks selling upon q
4 and ~ per cent. basis, while the United
States Steel Corporations common stock
sells so as to yield the investor n per cent.
and exhibits an earning power Of double
that amount, prssents something Of dis
parity. As late az year ago views Of this
kind were generally considered old
fogyish; now there 10 disposition TO
regard them more seriously. In addition
to these factors the price Of railway stocks
10 beginning to be affected by the continued
reduction Of railway net earnings caused
by wage advances to employees and the
higher cost OF conducting transportation.
The selling OF stocks in the last week
was undoubtedly caused by serious con-
sideration Of these matters by their owners
The attacks Of operators for the decline. the
nervousness engendered by the Southern
Pacific dispute. uncertainty as to the de-
cision OF the Northern Securities case. and
various market developments had much
to do with the fall in prices; but heavy hqui'
dalton was. nevertheless. in evidence. The
high-priced stocks Pennsylvania. New
York Central and st., Paul In particular
suffered most The Pennsylvania shares
reflected the feeling now almost universe
among people having to do with the stool
market, that new issues Of the stock OF any
company and the granting Of rights
to stockholders are REASONS for selling thu
shares Of the company rather than fol
buying them. In the case Of Pennsylvania
the quantity Of the proposed Issue, taker
in connection with the vast increases II
capitalization already made. might have
scared the stock market at any time. Tit
drop in the price Of Pennsylvania shares
was, nevertheless. . good illustration Of thu
great change that has come over the temper
Of Wall Street. Looked at from a purely
speculative point Of view the peculiarl,
discouraging features Of the market have
been the weakness Of bonds and the failur,
Of any vigorous rallying power to put il
an appearance. Bonds are always NOR
OF less weak under continued high money
rates; but the declines In both stocks ant
bonds that have occurred have not W
to this time tempted any investment
buying. 1t must be said, however. thai
even admitting that the tendency Of tn,
market Is still downward, . rally In price,
seems overdue. DANIEL =. KELLOGG.