The Washington herald., 1906-12-04
WALL STREET NOTES
Interest Centers in Chesa-
peake and Ohio Dealings.
PENNsY SELLS ITS HOLDINGS
High Money Rate DiscOurRges Gem
eral Buying and Produces some
LiquidatiOn-RumOr of IncFeased
Dividends in New York Central and
Lake shore and Michigan Renewed.

New York, Dec. 3-There was very little
bank money in the market to-day, and
the supply at all sources was small. One
Of the large national banks went through
the usual farce of lending a million or so,
to break the rate, putting it out in drlb-
lets of 100000 or $4,000, about the only
effect of which was TO display the real
eagerness Of brokers to get funds in al
most any way they could lay hands upon
them.
At one time it appeared as if a riot had
broken out in a corner of the room. At
the close q per cent was big. this being
the highest figure charged within the limit
of the days session, but after hours as
much as 30 per cent was offered for money
to carry over night
The seeming indifference of the market
to adverse money conditions recalled the
course Of prices a year ago when in spite
Of can rate as high as 125 per cent, the
movement in securities went upward un-
til it reached its elimination In January
Of the present year. It is just possible
that too large a proportion of the specu-
lative community counts upon a recur-
renee Of those conditions in the next few
weeks.
The rise in Chesapeake and Ohio throws
a curious sidelight on the value Of what
may be called semi-ofIicial information.
Representatives Of the Pennsylvania in
terest In the property have taken no small
pains to discourage bullish sentiment in
the stock. going 10 the extent Of explain
ing in a way which did not explain why,
with earnings Of upward Of per cent
for the past year, the company could not
afford to pay anything more than l per
cent yearly on the capital stock
Following these explanations" came a
rise in the stock which could not reason
ably be attributed to any other cause than
that the best informed class inspired buy
ing. What the buying was based on did
not appear until the rise had carried the
price up several points, but IL certainly
was not founded on the circumstances
which Pennsylvania interests endeayOTed
to bring prominently before Wall street
the alleged inability of the company to
pay more than about one-half Of its sur
plus earnings 20 stockholders. Some day,
when the road is adequately financed. it
viii pay a reasonable proportion CT its
earnings in dividends on its stock.
OF course, the real explanation Of the
rise IN Chesapeake and Ohio has now
come in the announcement ghat promi-
neat banking house has bought the Penn
8 holdings Of the stock. The sup
position on the stock exchange was that
the purchase was made on behalf Of the
Vanderbilt interest, which is already
large holder of Chesapeake and Ohio
stock. but some shrewd brokers said they
could detect selling that looked very much
like the beginning cf the distribution OF
the stock In the open market.
The bearish talk on Chesapeake and
Ohio and the rumors about the possibility
Of labor troubles in PENNSYLVANIA seem 20
have had a common origin and a similar
facilitate accumulation or
stock.
That some interest has been RccUmu-
lating in Pennsylvania in considerable
quantity, Is plain enough. Pennsylvania
IS selling at a price which Is lower than
the average of the past year, although
during the greater part of the period the
stock was only on a 6 per cent basis,
whereas the rate is now per cent having
been raised 20 the latter figure on the
November. It requires a great deal Of
money 20 move Pennsylvania SO ap-
parently the insiders were satisfied 20
take what profits they could obtain IN
the stock at about the time the dividend
was declared and then stand out IN an
Of dear money with a view
to buying whenever conditions were most
favorable to such an operation. The al
legged danger Of labor trouble and the
high rates for money which have dis
general buying and produced
some little liquidation have also fur
nished the insiders with the opportunity
TO buy back what they sold a few weeks
ago, and TO do it not only at considerably
lower prices, but TO save a good amount
on interest during a period Of very high
money rates.
The Pennsylvania October statement.
which is expected to make its appearance
in the very near future. should show
large returns.
SO much has been said in the past
eight or nine years about movements on
the part Of holders Of the Nonasserted
stock of the Northern Pacific Railroad TO
secure some recognition from the North
ern Pacific Railway Company. its sue
eessor in reorganization. that It IS a
wonder the street attached any i'm
Dortance to the present order. However.
as the only effort was a decline Of /
point or so IN Northern Pacific stock, it /
did not appear that the large interests In /
the present company felt any particular
concern in the matter
A rumor that the directors Of New
York Central would, at their meeting
ater in the month, discuss the advis- !
lbility Of placing the stock on a 6 per |
,ent basis was brought out by the &C
-ivity and strength OF this issue. but 1
he prevailing opinion was that nothing |
more than the regular quarterly ia !
per cent distribution should be expected /
1t this time. What gave some piausi- /
oilty 10 the talk Of an increase IN the /
ate was the fact that New York Cen /
raj. although only on a per cent basis. /
iold within points of Pennsylvania. /
which is { per cent security but the 1
approximation Of the price Of the stocks /
would seem to be sufficiently explained in /
he fact that New York Central had been
pretty liberal in the past few years;
md is likely to have more OF the
lind Of good things for IT'S stock
holders in the next few years, while /
Pennsylvania has neither given nor is
ikely TO give anything beyond its regular
lividend payments. Putting the rights
-bove the regular dividend payments, the
eturns on New York Central entitle It 20
eli as near Pennsylvania as It has sold
It any time recently.
a.