The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1905-04-09
SHARP REACTION
IN WALL STREET
Violent Relapse Shown in American
Smelling.
UNION PACIFIC ALSO DOWN
TONE AT THE CLOSING WAS
VERY HEAVY.

VERY HEAVY.
New York April S.--Prices underwent
sharp reaction in the two hours Of
trading today on the stock market
There We're no developments in the news
to offer a clear motive for the selling
which was based more on the doubts
in the minds of the traders over the
rate Of advance during the latter part
Of the week than on any change in
conditions affecting values American
Smelling particularly showed the eff
feCtS of recklessnesS OF the recent spec
ulatiOn and after rising two points re-
lapsed violently. An intimation was
broadly conveyed that there was Il
hitch in the long discussed southern
iron merger and the stocks in that
group collapsed. In Union Pacific it
was very clear that the attempts to
life the stock were meeting with the OBJ
Stacle of practically unlimited selling
orders. The prevailing sentiment in the
stock market attaches from the import
ance to the movement OF this stock
as a leader and the prospect of OppOsi-
ton to further advance was not rel
ished.
There was selling for foreign account
and the depression abroad was attrib-
uted to reports that a naval battle was
imminent in the eastern seas. The pos
sibility Of an important military event
during the Sunday interval prompted
speculative holders of stocks to tighten
their loads. The bank statement
showed the surplus reserve unimpaired
but the reduction of the loan item did
not come up to expectations. and the
cash reserve showed an increase of
81, 662. 600 i'm place OF the expected small
Increase. With the surplus item at Il
81
lions of the banks is not sufficient to
relieve the apprehension that the ii
per cent call money rate of Friday may
not be an admOnitiOn of some further
stringenCy next week. There was a
sharp drop in sterling exchange i'm re-
Spouse to this condition. in spite Of
the selling of stocks for foreign aC-
count There was some rally from the
low points. but the closing tone was
heavy. Total sales OF bonds, par value,
I.76O00O.
Review of the Week.
The tone of stocks was dragging and
Hesitation to some degree during the
early part of the week, buu developed
Increased animation and strength. The
hesitation was that manifest and more
persistent in the railroad list than in
the industrials section. The Spasmodic
advances in "A large number Of COM
paratiVeiy obscure fndueCrfafs stocks
I,
but when United States Steel preferred
emerged late into prominence with an
aggressive and sweeping advance the
sympathetic effect ON tic general tone
became more pronounced. The under
lying factors contributed to the early
mixed tone. The most effective of
these was the contention, asserted by
am important element among Sne COM
mission houses and BARRIERS, that the
level OF prices was already sufficiently
hi ~,T--
proVement in conditions. with a dan
ser that the process Nigh be OverdOne
by the CVarstimulatiOn OF the many UNI
confirmed rumOrS and mysteries, which
had been the motive for extended spec
uiatiOU i'm various stocks.
Even the confirmation of these ru-
profits. while a disappointment of the
mors. IL was urged. would be the sigma
for heavy selling to take speculative
prospects held out might lead to an alb
rupt reversal Of position in the market
ON an extended account. The uneX-
peCted news of the plan to issue new
Union Pacific preferred stocks 10 the
amount OF 800 600, 900 thus doubling the
present issue, caused perceptible
shock to the market. Great as the va
r1ety of these has been. none of them
has pointed to the preferred stock is
sue. Doubt was therefore aroused Of
the correctness Of the information on
which the great speculat ton in the
stocks has been based. The prospect
Of four per cent dividend claims on
500 OOO. 900 of preferred stock ahead of
the common stock seemed fOrmida BILE
and shook the stability OF the appear
anCe Of the common shares. but power
ful and affective support. was offered
and the price sustained.
Merger Rumors.
The effect was to revive the circuI-
alton of merger and combination ru-
mOrs and TO confirm the confidence of
operators in the stock market that the
stock issue was designed 10 perfect
some great plan of amalgamation in
the railroad map The determined
withholding of all official information
OF the proposed use for the new re-
source was an Indictment to conjecture
rather than to damper to confidence
and this proved an important influence
on the renewed outbreak or speculative
excitement. The faVOrite supposition
for some time has been that Union
Pacific contemplated the acquisition of
Chicago & Northwestern and New York
Central for the formation Of an I'M
known system from ocean 10 ocean.
Other supposed acquisitions covered by
the weeks busy rumOrs have included
the Atchisoa. St. Paul, for the recovery
of the Northern Pacific, control Of
which was lost AS a consequence Of the
hcrn Securities decision.
The incidental declaration in the SUI
premC court decision that the delivery
OF the control Of Northern Pacific to
the Union Pacific interests would di-
rCcty cOntTavene the object Of the
Sherman law and the purposes Of the
government suit against the Northern
Securities company received only cas-
Ual attention in the progress of the
excited speculation. The sudden jump
Of United States Steon preferred 20
above its previous record price. made
I'm the course of the operations incident
to the flotatiou of the securities of
the new corpora ton in 1901. was of
decisive influence on market sentiment
Reports from all quarters Of the steel
and iron industry for some time have
pointed to a volume of orders unpre-