The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-12-18
$i@,OOG,OOO MORE OF ST. PAUL
SHORTS SQUEEZED SEVERELY IN
a PRACTICAL CORNER.

buey fhOtu-Hw nuAlu factnc tNtenst0n.
The board Of directors of the Chicago,
Milwaukee and st. Paul Railroad at n special
meeting yesterday voted TO issue prao-
tically 300 900. 200 Of the $3.50. 900. 900 capital
stock authorized by the stockholders last
October. The increase is among the largest
ever put out by an American railroad and,
together with the Northern Pacific and
Great Northern issues last week, makes a
total Of very nearly s253, 100000 new stock
issued by three Northwest roads in exactly
seven days.
stock is to6, S27 100 preferred and SIS .iss. 200
common There was authorized in October
SIS 900 900 preferred and SIS 200, 900 common.
Tn new stock is to be offered ia stock
holders at par, preferred and common
holders sharing equally in the allotment
Of both classes. Every holder Of pre-
ferred or common or both preferred and
common will be entitled TO a n allotment
at the ratio Of two shares Of new preferred
and n share Of new common for every
four shares OF stock held by him Of record
on the books Of the company December 10.
The amount Of the new preferred in ap-
proximately 50 per cent. and the common
rs per cent. Of the outstanding preferred
and common combined.
As in the cases OF the Great Northern
and Northern Pacific issues, payment for
the new stock ia to he stretched over a con-
siderable period Of time. The series il as
follows: Ten per cent, December 81. 1906
10 per cent. June I, 1907; 20 per cent, De-
cember I, 1907; 20 per cent, June 1, 1908;
20 per cent, December /, 1908; Is per cent.
March /, 1909. To American stockholders
the privilege OF subscribing extends to
December 81. Nonresident foreign stock
holders have until January 10.
The stock will not be Issued until after the
final payment, but meanwhile the sub
scribers will receive 5 per cent. interest on
their payments. As in the case OF the Great
Northern and Northern Pacific issues esti-
mates of the value of the rights vary Oh
account Of the time ensuing before the de-
livery of the stock and consequently its
participation in the dividends Of the COM
pany. An estimate based OF 207la for the
preferred and 1877 for the common, both
closing prices yesterday, places the value
of the rights at $50 a share.
At the Offices Of the company il was stated
that the receip t. from the stock are to be
devoted TO comp elton of the Pacific Coast
extension authorized by the company last
600 miles of branches AMI coutin-
gencies. Ii was estimated that the Pacific
extension would cost at least S75, OC0, OCO
and probably more and that S25 ,OOO, 900
was not too much for contingencies.
The exact route OF the Pacific Coast ex-
as announced last week, puts the
ST. Paul into close competition over a large
part OF the route with the Northern Pacific.
The branches to be constructed will I'M
doubleday invade the territory of the
Northern road to a considerable extent,
and the amount Of money appropriated
for construction leaves no doubt that the
company intends to construct a line that
will be equal TO that of the Hill roads.
v when the latter have expended the
1853, 600. 900 announced last week TO he
raised for new construction and improve-'I
When last year the plan Of the st. Paul
TO build 10 he Coast was announced IL
was stated that the extension would be
l 500 miles long and would cost about
OOO, 600. Now it appears that with
branches the whole plan contemplates
the construction Of more than 1000 miles
Of road. Work on the extension had been
when announcement Of the plan
was made and large sums were expended
il out Of earnings. The first new financ-
ing on its account was made a few weeks
in an issue Of SIS, 600. 900 treasury stock.
Entirely apart from large sums expended
Of earnings there has thus been set
for the work about SIPS 900, 900.
On December st. Paul stock sold at
1872. At n time yesterday it sold at lss%
and il closed yesterday at 1877, with a net
gain of one-half of l per cent for the day. In
the interval between the two days there has
not been a time when the stock reacted
sufficiently to enable a short to cover his
without loss. On nearly every
day the stock has advanced and on several
days the advance has been as great ar from
to o points. Even on the day last week
Northern Pacific and Great Northern,
the one falling IL the other IA points, carried
most of the market with them st. Paul
gained more than 2 points.
Many Of those short of st. Paul at the !
beginning OF the movement held on In the
hope that a reaction would give them a
ohance to break even. Others took their
osses, but others still, thinking the advance
had reached Its apex, sold short on that
speculation, so that at all times during the
ADVANCE there was a big short interest.
Wall Street figures that bear losses in
he movement aggregate many hundreds
Of thousands Of dollars. There was a
we'll defined report yesterday that one
Of the largest brokerage houses had called
$4,000 shares either for themselves or
heir customers and this stock, it was said, |
the covering Of short contracts
by one house alone. There were other
Of a sharp squeezing Of shorts
IN the declin e OF the loan rate for the stock.
From 10 per cent. a few days ago the loan
rate declined rapidly yesterday, and toward
he close a fiat rate prevailed. Since there
s no surer indication OF squeezing Of shorts,
he Street took this decline in rates as
the many stories Of heavy
Osses which were in circulation all day.