The Washington herald., 1906-11-27

pressed the opinion that any advance In
the rates world be sure to accelerate the
flow of funds from out of town. and for
this reason were inclined TO view the sit
uation with entire satisfaction.
AS a rule. they believed there would be
a stiff money market through December,
but that funds could be obtained for all
legitimate purposes even without relief
from the Treasury II only the rates were
made high enough There would be no
reason, it was asserted, why Wall street
could not continue to do business, only
that the high interest rates might prove
something Of a handicap to purely specu-
lative operations.
In banking circles it is said that there
is probability of another pinch in money
this week not only on account of the
preparations for the dividend disburse-
ments, but because Of maturity Of foreign
and domestic loans to a large amount
1t IS not anticipated that there will be
any great amount of liquidation on ac-
count of ehese maturities. bat II IS not
unlikely that the state Of the time-money
market will be such that the borrowers
will ne Obliged TO pay pretty high for
renewals or for new funds. 1t is this
factor, far more than anticipation OF q
disappointing Union Pacific annual report
that has been responsible for the decline
in the stock market
My guess" said well-informed bank
er lis that the call-money rate will 20
as high as % per cent this week. but if It
does it will not stay long there. Such n
rate would bring speedy relief; and while
l do rot look for ease-which would cause
gold exports-I am not at all apprehensive
Of a condition of stringency such as was
experienced in December last year.
Secretary Shaw will next month have
at his disposal possibly as much as
100000 for the relief of the money
situation Mr. Shaw. apparently, con-
siders il his duty to use the Treasury's
surplus to relieve the money market at
time OF need. and the coming month will
afford him the last opportunity he shall
have to do so. Belief that he will en-
brace the opportunity is one of the
reasons why larger holders Of stocks cling
TO them with such tenacity, the argu-
ment in the case being that everything
is favorable for "a higher level OF prices.
except the artificial condition imposed by
the Treasury's locking up Of funds, and
that this viii not be permitted to con-
tinue TO the point Of imminent stringency.
Almost every trader professed to have
some inspiration in regard 20 the showing
in the Union Pacific report, and in nearly
every case the intimation was that the
document would prove disappointing. one
estimate which was said 10 have ema-
mated from the highest quarters, and was
the lowest of all, placed the earnings
for the year at only II per cent on
the common stock, including about Sl0
000.OOO returns on investments. Few
brokers believed this came anywhere near
the actual results as shown in the report
contending that it looked very much as
if an attempt was made to produce the
impression that the statement would be
"a poor one. so as 10 tone down the
rampant enthusiasm that had formerly
characterized all estimates of"that nature.
One broker. whose views were out Of
line with those Of the majority OF trad
ers on the subject of the Union Pacific
report, said:
The coming report is TO be the vindi-
cation Of the policy Of the Union Pacific
management in putting the common
stock on a 10 per cent basis last summer.
Z. II. Hartman has been severely criti-
cised for the action then taken. and has
undoubtedly taken pains 10 arrest his
critics by making the annual report show
good reason for what was done. He is
not Indifferent, and could not be, to the
sort of criticism that his action-for he
4. faI Fd- -ad h.
must set himself right before the finan-
cial communities on both sides of the
Atlantic.
Il know how strong the feeling on the
other side has been. for 1 was In London
at the time the dividend was declared
and heard the strongest condemnation of
the course followed, not merely from
members Of the London stock exchange
but in the most influential quarters and
from men accustomed TO taking broad
view of affairs.
1t would be 4 very great mistake not
TO satisfy such interests with good rea-
sons why the dividend was raised from
to 10 per cent. and I. for one, do not
believe that Mr.. Hartman has made
such blunder. The report is now in
print and cannot be changed. but l have
no doubt the nature of the situation has
bttiA itNbSliiItu ana Aiidl no reason IS
left why any one should desire a change"
Against the view expressed above It is
urged that while weeks ago the intention
to put a very fattering report, setting
forth in convincing detail the value of
the Union Pacific equities, might have
been entertained. there has been modi-
fication Of the original purposes. and that
the coming document will not at first
glance appear very favorable although
close study may bring out points in justi-
ficatiOn of the dividend policy adopted
last summer. The present outcry against
corporations. it Is rumOred, had a good
deal to do with the change toward greater
conservatism in the character of the
statement.
Traders speak of Pennsylvania as the
most discOuraging stock on the whole list.
When other stocks go up. it moves very
slowly or not at all, and when the general
market hesitates, it is one of the first to
go down. This characteristic has been
especially marked in the past few weeks:
the stock was weak in the rise about the
middle of the month, and one of the heav-
lest features on the decline to-day. The
labor situation has been blamed for the
weakness of the stock, although so far IS
the discharge Of n few hundred men from
the shops is concerned, this is of very lit
tie significance.
The real trouble seems TO be that AT
about the time of the dividend declara-
ton, the interests which usually make
movements in Pennsylvania took profits
and have not since bought back their
holdings. 1t appears, also. that in the
expectation Of the stock figuring as a
tail ender" speculative interests accurnu-
lated considerable lines a week ago an
ticipating a quick profit, and that the