The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1903-02-16
Expected Sensational Announce
ment Which Would Send the
Stock Spinning Upward.
INCONSISTENT CORPORATIONS.
Boasts of Great Prosperity and
Tremendous Earnings Often Ac-
companied by Borrowing and
Stock and Bond Increase.


REPUBLIC SPECIAL.
] New York, Feb. 15.-Wall street. at the
end of the week. was given over chiefly 10
a consideration of the financial plan
brought forward In connection with the
Erie Railroad. That the announcement Of
the creation of an additional mortgage of
SSo.cOo,0O by the company. of which $40. Co.,
e0 IS to be at once issued. should have been
accorded a poor reception in speculative
quarters is not strange. for it had been
preceded by SO much mystery.
Wall street does not like the Erie plan
simply because. in its cupidity. it expected
something more sensational. something
which would send the stock spinning up in
to the air and permit the holders to sell
out at a large profit. In their ~disappoint-
ment, SPECTATORS %criticise the company for
the high rate it has been forced to pay FOR
Its money. ignoring entirely the tact at all
times they could inform themselves as to
its unsatisfactory credit. when prior lien
bonds sell at IS and the general lien at 81.
The $lO, 900 of new convertible bonds,
by a syndicate-according to
report-at 81. will net the corporation S.
2S.Uo. equal on conversion into so. go, 900 OF
stock at Al a share fer Erie common less,
PAID on the bonds. pending their conversion
into stock.
dependent upon the fact of whether the
conversion of the bonds into stock Is man
datory between April l. 1906. and April /.
1915. or whether they may run at the op-
ton OF the holder for the full period OF
hlty years ana also upon the uGVelOpmenI
OF the property in the meanwhile, rests he
determination Of the question of whether
the road has financed wisely and as econ
omically as was possible.
CORPORATIONS INCONSISTENCY.
Possibly the unwillingness of the public
to participate very extensively at present
In the security market arises from tire fact
that at the time corporations are boasting
earnings they are borrowing the most
money and preparing to issue the greater
quantity of stocks and bonds
The business man becomes a little sept
ical If his acquaintance who, after telling
or his great successes in business. his
horses. carriages. automobiles. his fine town
lative success or the like, ends by saying
that he has forgotten his pocketbook and
requests a loan of $500 or sl,GO. So 1t is
with the corporations. They might turn a
heavier proportion of the great earnings
into improvements and less into extrava-
gance Of operation and expenditure.
If. in their desire for additional funds. the
companies were forced to levy an assess
ment or from s. TO 500 a share on stock,
some extravaganza would stop. and a rea-
sonable check be placed on credit. Share
holders would then pay some attention to
the administration of their properties and
realize that stock and bond issues increase
ilapiliCes, which are largely offset by mere
ly bookkeeping entries OF additional cost of
property or equipment.
CONDITIONS IMPROVED.
The stock market Of the week made an
has hung over it like a pail for many DAYS
and at the outset gave a fair counterfeit
presentment of activity. But the dealings
s Tere lafse,y professional. and the first
Tor those who had stocks for sale.
professional proft-taking checked the ac-
tvfty, and Saturday the market acted as
though in a trance. The duIlness and
heavy tendency of the market. in the face
or good news. was doubtless very disap-
pointing to the rank and file of wall street.
but. in the absence Of liquidation. and in
the force Of generally improving condi-
tions. 1t Is of little real significance.
All the fndices of trade point to a con-
tinuance OF satisfactory conditions. In
several particulars. the developments have
been highly important. The signing of the
peace protocol and the lifting Of the
blockade of Venezuelan ports eliminates
that situation as a disturbing factor. The
adoption Of the amendments to the consti-