The Washington herald., 1906-11-24

I the aggregate accomplished a consider
/ able reduction in the loans of the asso-
/ ciated banks. or had replaced loans Of
/ private bankers or institutions IN the
/ clearing house. could not. of course, be
determined with any accuracy.
Wall street houses having influential
: connections abroad report that there is
a continued Improvement in the sentiment
IN the best places in London: in fact
/ that the Bank of England is strengthen
ing its checks daily The apprehension
( felt "a few weeks ago. when the bank
4 raised its rate 20 6 per cent, appears to
! be fast disappearing
No abatement of the eagerness with
which the publication Of the Union Pa
( clic annual report has been awaited for
/ weeks can be noted in Wall street. and
F il Is "a very long time since any similar
/ document possessed anything like the i'm
/ portauce as a market ractor that is at
tacned 20 this one.
! That the market can ignore the report
/ hardly anybody believes. although. OF
course, there is "A great difference OF opIn-
/ ion as TO what the effect viii be This
/ difference Of opinion is very natural. in
port viii show. IL is felt that the showing
VIII be favorable, but. then. it is CON
| tended that merely favorable viii not sat
I jsfE the speculative mind. which has long
+ taken that Tor granted. ana that unless il
+ is exceptionally SO. it viii not have any
f Important influence on the bull side II il
+ fails to stimulate bulish sentiments
which viii Doe JEo case unless it exceeds
( ieNpeotatiaus-theni il is argued one of the
props which supports the market viii DE
removed, and the effect viii be something
+ like that of the announcement Of the
Great Northern melon. on the other
( hand. if II should be found that expecca-
tiol has fallen short OF the actual facts.
then the effect. In the opinion of some
sood Judges IF market conditions, will be
around advance iu prices.
/ I'm spite Of intimatons o. the contrary.
emanatinE from good quarters. there is
I srHl expectation that the Union Pacific
management viii before long announce "a
/ plan 20 separate the holdings Of securities
from the railroad property. capitalize
them in separate company. and as
/ tribute the stock cf this as a bonus to
holders Of Union Pacific
Realization Of this expectation. how
. I
. best quarters IL is said that while such a
plan has been Informally discussed. the
/ discussion was rather from the standpoint
/ # what future conditions might call for
I than OF anything in the present situation.
No important change in the status Of
/ Union Pacific stock. II is asserted is immi-
uent. but as conditions are constantly
changing. the management considers il
part Of its business TO anticipate these
changes and thus be i'm readiness to deal
/ with them when they occur.
As a factor in the rise in Missouri.
/ Kansas and Texas. the existence Of q
I large and stubborn short interest has
1 been nearly as important as the absorp-
/ tion of the stock for permanent invest
/ menJ There is little doubt that both the
common and preferred have been taken
ont of the street in large quantities TO
+ lock up permanently. but whether the
/ short interest has been unable 10 recog-
/ nize this or recognizing it counts on a
! Jet ND ia the bulling which would enable
to retire from its position, can only be
surmised. but whatever the expectation, it
is abundantly clear that covering has not
/ yet been accomplished.
The borrowing which is done privately
[ instead OF IN the loan crowd, shows that
large buyers Of the stock no sooner make
their purchases than they are approached
with proposition 10 lend what they have
( bought. Ii might be inferred that this
means an enlargement Of the short inter
est but not necessarily. So far in view
of the activity in the stocks, the borrow
ers may be obliged from time to time 10
of
the withdrawal for sale of the shares
originally borrowed 10y them. This neces-
sarily keeps the borrowing demand pretty
active. Katy has so often reacted from
about its present level, that ii has come
to be looked upon by certain spectators
/ as safe short sale around 20, and hence
/ the confidence Of the short interest
Presumably the shorts in Missouri. Kan
( saS and Texas argue that if there is buy
/ lag for control. the buyers viii not be
/ particularly anxious TO force up prices
as this would only increase the cost To
them Cf the property which they are seek
/ ing TO acquire The usual course is 10
/ take oh the stock that can be obtained
Iup to certain level. and then to force
/ q reaction with q view 20 shaking ont
/ the spectators who have tailed en- the
upward movement. At such times the
[
tUnity TO cover. after the lack of support
/ is evident and sentiment changes totally
until on the resumption Of the absorptive
demand the buyers find that the stock
again comes easily. These tactics are
/ followed time and again, until il is found
/ that there is little more stock to be had,
and that TO cause a reaction about as
much must be sold as can afterward be
b7Ught back. and then there is the ag-
Eressive buying. which generally precedes
/ the announcement of a deal. At the end
/ the price may go very high but the ne
cessity in their Judgment justihes the
course followed for the average price. If
the action has been done scientifically.
viii not be excessive.
Application of Hill methods to Missouri.
Kansas and Texas would produce sur
/ p1ising results.
Early in the year stockholders Of Co
lUmbus and Hooking Coal and Iron were
offered the privilege Of subscribing at
par for an allotment Of $ per cent bonds
Of the company. at which they were to
be given as bonus noncumulative 8 Der
cent preferred stock to the amount of