New-York tribune., 1903-02-15
financial.
The Financial World.

being quite lively and strong under the lead of
the Gould stocks. Appearances we're deceptive.
however. There vitality IN the market
1t dropped away into it's customary duIlness.
and Friday had something like slump.
which was attributed largely to disappointment
over the Erie plan. The Erie issues were the
| first to give way: and but for supporting
order put into the common when ii broke 40.
the price of the stock would have probably been
! driven down between 36 and 80 Some twenty
thousand shares are known to have been bought
for inside account under 20; and possibly more
than this was bought. which was not traced
1t was very generally said Of the Erie plan
| that the mountain had brought forth mouse
Somehow. the public expectation had been
worked up to expect big thngs-the taking IN
of new properties. grand new Erie corpora
ton with merger arrangements, a .eomprenen-
sive financial scheme to cover the whole oGsi-
ness; something in fact. which the average man
would have to sit up at night to read and dl-
gest; and behold. it was nothing but Just an
| ordinary issue of ten million convertible bonds
| The traders sold their Fries in disgust il they
had any, and sold short if they did not
| However. the scheme provides for nifty
million issue, it will give the company the
money it needs. provided the bonds can be
sold Probably it was the making of arrange
ments to get the bonds taken which gave Mr.
Morgan his chief concern. semi-offcial state
| ment given out yesterday, implies that place
has been found for the whole fifty millions, "a
they shall be issued, and not merely for the ten
millions TO come out The company will
get for the bonds about Ss, J00V0 cash; allowing
that stockholders subscribe for a fair proper
ton at S119, and what they do not take go 10
the underwriters at s.. 1t is rather high price
to paw for money but doubtless the Erie could
do no better 1t is pretty we'll mortsaged up al
ready The bond market, also. is congested:
new issues are almost unsalable, unless special
arrangements made In this case. it is
stated that most of the underwriting is done
abroad.
The bonds being convertible into stock at
par of 30, it follows that there is potential
issue of hundred millions of new stock-a
fact which the nimbIe traders quickly offered
as an argument for selling the stock now Mo
the underwater who gets his bond at 81. the
stock would cost ia trife the present
market price. Yesterday. the bonds were run
up 80 the curb. deliverable when issued
Special efforts ara undoubtedly being made at
this time, and viii continue to be ma de. TO
throw over the Erie every ton Of freight which
can be placed there, make good show OF
earnings Comparison, also. is now being made
with poor earnings Of the previous year; and
the resulting showing is very favorable. The
December report presents earnings at ratio
which gives per cent tc both first and second
preferred stocks and something over per cent
on the common. Although, as said above. the
company is paying rather high price Tot l's
new money yet it is fair to suppose that IL VIII
paw the company great deal better to raise II
at that cost rather than to lack the improve
ments which the money will provide
Outside the Erie affair. there was little IN tne
railroad list calling for comment. The Gould
stocks had started the week with quite lively
advance the wabashes Missouri Pacific, Texas
and ST. Louis Southwestern all going up, esPe-
ciaIly the wabashes. The squirt did not last
however: for 2 house which is recognized a.
doing an almost exclusive Gould business, thre"
some stock on the market and promptly damp
ened it. There is not enough public to take
much more than homeopathic doses.
The extraordinary occurrence on the Southern
Railroad when the high priced fast train was
backed twenty miles to pick up three or four
Messengers because they happened TO be per-
sons of social prominence, was the talk of the
Street. On the same day and IN the same
paper appeared the protest of twenty-slx pas
sengers who had started for New Orleans on
the Southern and were indignant at their
experiences on the way. that they united IN
drawing up and signing a public protest against
the mana cement. rather mismanagement or
the company. Such document from party
OF railroad travellers is almost unique Inc
two things together operated to direct atten-
tion to the Southern. and it appears that a
bad state OF affairs is developing there, ~hlch
must before long show itself in the gross earn
ings 1t is already apparent in the net; but
as gross earnings are comparing with PAD
time the year before. they still make a respect
able show The Southern system is now one
of nearly 5000 miles: and it has got beyond
the grasp of President Spencer. He was all
right for system of less than half what the
Southern has become, but an 5000 mile sys-
tenn has overwhelmed him. and it is getting
all at loose ends. eubordinates are not to
blame for this. for II is doing his own man
aging. In fact. ths time when things began
to go to pieces dates from when. some months
ago. he went to Washington to take personal
charge of the running of the road
There were runors current in the past day
or two that something might be looked for the
coming week in the traction stocks-Eetropoii-
tan chiefly They were very ~ague, out seemed
TO indicate an important private transaction
affecting that stock.
In the industrial department of the market the
oIerations of a bull pool in the Leather stocks
may be noted The common stock is hopeless.
but the preferred stock ought to sell at par as
a minimum 1t pays 6 per cent steadily. and
there is nothing in the outlook for the company
indicating an inability TO continue this rate;
tn ere is rather. hope for increase. IL was
probably the fact that the stock was selling
low in proportion TO its earning capacity. which
prompted the organization of a pool in ii. The
pool has been able to mark up the price some
points but probably finds the apathetic temper
of the market 70 he difficult obstacle
come. This however. has nothing TO do with
the intrinsic value of the stock: and as things
go. industrial ola this. ought to sell