The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-04-08
GOSSIP OF VAR srREEr.

As far back as Thursday last men who
have facilities for making accurate estimates
predicted that the bank statement would
disclose a disa ppearance OF the surplus. re-
serve. The publication OF the figures yester-
day more than justified the prediction and
also proved tho truth Of the aphorlsm that
1t ls the unexpected that makes or mars a
bull market, The people who had the stocks
knew pretty accurately what would happen
and being prepared for it were not disturbed
when the expected came to pass. Had they
been unprepared the effect might have be en-
widely different. The traders did not know,
and therefore sold stocks on what seemed to
them on Unexpectedly bad showing by the
banks, but they soon found that there was a
market for all they had to sell, while the
undertone was SO good as to discourage u
continuance of bearish operations. The bulls
made no special effort TO lend support. but
we're willing to take all stock offered at re-
cessions. The belief in easier money for the
coming week was SO strong that a 'good many
brokers who had advised caution on Thursday
and Friday were inclined to look with favor
on the bull side.
In a few places 1t was even said that the
money market would drop into a position OF
positive ease within the next few days. Such
antioipations were OF course regarded as
entirely too optimistic by prominent financial
interests. the belief In the best quarters being
that money would remains stiff throughout the
present month to the extent that nothing
moro favorable than q s or 0 per cent, rate
could be expected. A somewhat lower rate
for money was looked for. but there, was a
decided disposition to argue that on account
OF the tremendous activity In general business
throughout the country real ease In the money
market should not be looked for within the
next few months.
This was In important consideration:
The tightness Of money was not due to the
tlmidity Of lenders. but to the fact that the
oountry's activities absorbed so much as to
leave the amount available for speculation
In Wall Street rather limited. Commercial
requirements received first attention and the
Street had to content itself with the I'M
usually small residue. In other words. Wall
Street suffered temporarily from a condition
Of general prosperity which meant enhan CO.
ment OF value In the securities Of railroad
and industrial corporations. This tended
to make values increase moro rapidly than
prices and to strengthen the technical posi-
tion In preparation for the time when easier
money conditions enabled a resumption Of
aggressive bullish operations.
why 10 not Reading q better stock TO buy
than Pennsylvania. with the prices so near
together? This question. which was asked
III lnduy QuhTt0Ih, ltnplieu ~ TcucClOu Oh
Pennsylvania. Reading Is a fine property.
with q great future. whether the anthracite
miner decide to strike or not. But Penn
sylvania carries itself and Is the kind Of COL
lateral that bankers and money lenders doff
their hats to. Some day Reading may pay
q higher dividend than Pennsylvania. but at
present the latter pays Q per cent, while the
former pays only 4. Loan clerks are not
in all cases expert judges Of values. and
many Of them fail to see why Reading. which
two or three years ago had never paid a
dividend and sold at about 10. should now be
worth nearly 40. while only on a 4 per cent.
basis. II they could analyze the affairs Of the
company they could see why. As they have
not the time or lin many cases) the ability
to do this. they give the preference to a stock
like Pennsylvania, that has q remarkable
dividend record and whose present o per cent.
rate Is about as safe as could be desired.
Lately there has been a report about a posi-
bic increase In the Pennsylvania dividend.
This. however, 80 far as 1t concerns the FORTH
coming declaration. Is only Street talk, II II
referred to the dividend to be paid next De-
it might be worthy Of more respect.
Not very long ago many people had serious
doubts as to whether the present g per cent.
rate could be permanently maintained. but
all suoh fears have now disappeared and the !
possibility OF an increase to 7 per cent. toward
the close of the present year IL not unworthy
OF consideration Those who figure on 1t as
a factor In the present movement in the stock
derive great encouragement from tho growth
OF earnings. The first two months Of the year
showed a gain of s2,5 5000 in net earnings,
and 1t Is estimated that March will show a gain
Of at least 81, $50, 900. as compared with tho
corresponding month in 1905. This means
an increase OF upward OF s.. 800. 600 in net
for the first quarter OF the year. Speculation
,.s-LN t,I,,lpa ~ acf i'm tal NJ what pnttI H.. I
for the stock II this rate of increase
was continued throughout the year, but the
bulls on Pennsylvania do not believe in en-
expectations which might not be
realized. The fact cannot be ignored, how
ever, that Pennsylvania earned in the first
three months OF the year an increase In net
which would moro than sunlce for the pay
ment Of an increase of 1 per cent, in the years
dividend.
Pittsburg has come IN as a large buyer
OF the United States Steel issues. OF this
there can be no doubt. This change Of senti-
ment on the part of prominent interests in
the iron city il OF very great significance
in its bearing on the stories of n decline in ,
the trade. These interests know the steel !
business as few people in New York know it, !
and when on the last big rise in the stock
they turned sellers. brokers here said that
the fact had no great Significance as II merely
profit taking by men far removed
from sources of financial information and
who had comparatively little knowledge
on matters OF speculation. Subsequent
events, however. showed that it was signih-
cant and that 1t just preceded the lull in the
trade which is apparently now about TO give
plaoe to renewed activity. There is no better
Of general conditions than the
steel industry. and there are none who can
more correctly read IL than the Pittsburg
mon who have made a life study Of the bust
ness. Their present attitude is therefore
a matter OF considerable importance,
The decline in Union Pacific was accom-
panied by rumors OF selling by large inter-
in the company, but these stories we're
not gen orally credited. The more probable
theory was that the great strength which
the stock had displayed for a week past had
created a weak bull following and that GER
tain operators und ertook a movement to
shake out a part Of this. believing that such
III - 1000 --tNI 49,. 1rf .~