The Saint Paul globe., 1905-04-09
PROFIT TAKING
ON THE ADVANCE
Market Shows Nervousness
and Prices Change
Rapidly

the news to offer a clear motive for
the selling, which was based more on
the doubts in the minds of traders over
the rate of advance during the latter
part of the week than on any change
in condition affecting values. Ameri-
can Smelling particularly showed the
effects of recklessness of the recent
speculation and after rising two points
relapsed 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
lift the stock were meeting with the
obstacle of practically unlimited selling
orders. The prevailing sentiment in
the market attaches great Importance
to the movement of this stock as
leader, and the prospect of opposition
to further advance was not relished.
Foreigners Selling
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 load. The bank statement show
ed the surplus reserve unimpaired, but
the reduction of the loan it would not
come up to the expectations, and the
cash reserve showed a decrease of
S2,662,O00, in place of the expected
small increase. With the surplus item
at low stage the Improvement in con-
dition of the bank is not sufficient to
relieve the apprehension that the Az
per cent call money rate of Friday
may not be an admonition of some
further strtngency next week. There
was sharp drop in sterling exchange
IN I-s
or the selling of stocks for foreign ac-
count. There was some rally from the
low point, but the closing tone was
heavy.
Total sale of bonds, par value,
s1,760,000.
Steeis Advance Sharply
The tone of stocks was dragging and
hesitating during the early part of
the week, but developed increasing an
1mation and strength. The hesitation
was more manifest and more persist
ent in the railroad list than in the in
uustrlal section. The spasmodic ad-
Vances In large number of compara-
lively obscure industrial stocks was of
doubtful effect on sentiment, but when
United States Steel preferred emerged
into prominence with an aggressive
and sweeping advance the sympathetic
effect on the general tone became more
=
OF the business and industrial situa-
ton served as a buttress TO the values
or securities at all times but some
modifying factors contributed to the
early mixed tone
The most effective of these was the
contention, asserted by an important
element among the commission houses
and bankers, that the level of prices
was already sufficiently high to repre-
sent adequately the improvement In
conditions, with danger that the
process might be oVerdone by the
oVerstimulation of the MANY uncon-
nrmed rumors and mysterious reports
which had been the motive for extend
ed speculation In many stocks. Even
the confirmation of these rumors. IT
was urged. would be the signal for
heavy selling to take speculative
prohts, while disappointment of the
prospects held out might lead to an
abrupt reversal of position in the mar
ket on an extended account.
Union Pacific Preferred Issue
The unexpected news of the plan to
issue new Union Pacific preferred
stock to the amount of 800. .OOO. 900.
thus doubling the present issue, caused
perceptible shock to the market.
Union Pacific has been the subject of
more rumors and more active specu-
iatlon based on them than any other
STOCK In the market. Great as the va
riety of these has been, none of them
mas pointed to the preferred stock is
sue. Doubt was therefore aroused of
the correctness of the information on
which the great speculation i'm the
stock has been based. The prosnect-nf
4 per cent dividend claims on S10O, ,OOO.-
OoO OF preferred stock ahead of the
common stock seemed formidable and
SHOOK the stability of the prices of the
common shares, but powerful and eff
tectlVe market support was offered and
the price sustained. The effect was to
revive the circulation of merger and
combination rumors and to confirm the
confidence of operators in the stock
that the stock issue was designed to
perfect some great plan of amalgama-
ton on the railroad map.
The determined Withholding of all
official information of the proposed use
Tor the new resource was an incite-
ment to conjecture rather than dam
per to confidence and this proved an
important influence on the renewed
outbreak Of speculative excitement.
The favorite suppoSition for some time
has been that Union Pacific contem-
plated the acquisition of Chicago &
North western and New York Central
for the formation of an unbroken sys-
tenn from ocean to ocean Other sun-
posed acquisitions covered by the
weeks busy rumors have included the
Atchison, the st. Paul or the recovery
of the Northern Pacific, control of
Whlcn was lost as consequence of
the Northern Securities decision.
iron and Steel Industry
The incidental declaration in the su-
preme court decision that the delivery
or the control of Northern Pacific to
the Union Pacific interest would direct
ly contravene the object of the Sher
man law and the purposes of the gov
ernment suit against the Northern Sc
cur1tfes company received only casual
attention in the progress OF the ex-
cited speculation. The sudden Jump of
U. s. Steel pfd. to above it's previous
record price, made in the course of the
market operations incident to the fiota-
ton Of the securities OF the new cor
poration in 1901, was of decisive in
huence on market sentiment Reports