Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-01-26
BULLS AND BEARS
Special Dispatch to TIE Star.

Special Dispatch to TIE Star
NEW YORK. January 23.-when many
little towns and cities can sell and are
selling 3k per cent bonds at premimum
1t Is hardly reasonable to say that New
York city cannot sell 81 per cents at par
because the market shows that investment
demand for 81 per cent bonds is not good.
The trouble with New York bonds Is simply
that the quantity issued In the last few
years has been very large. that issue has
followed issue very rapidly and that there
is plenty more in sight,
IE way 1t Is the same thing as saying
that the demand Is not good when It is
said that the market for city bonds here 10
glutted. but It must be remembered that
in the nature of things the demand which
absorbe municipal issues must be largely
OF local origin, and there Is such a thing
as satiating even such an avid appetite as
Is that Of New York city's investing public.
Controller Metz let it be known yesterday
at meeting Of the Rapid Transit Com
mission that within the next two weeks
the city would advertise IN issue of 3d.
OO.O00 OF corporate stock. to run for nifty
years, and to bear interest at the rate of 4
per cent. The last sale of city bonds.
which was made in December. brought
price not much over par. and the controller
has decided to advance the interest rate on
the coming Issue to per cent In order TO
issue of per cent municipal bonds which
has been made by New York in many
years 3h per cent having been the pre-
yailinE rate.
Analysing yesterdays market and the
previous markets of the week Bartlett,
Frazier & Darlington say:
1T Is idle to assume that the selling
OF such stocks as Union Pacific, st. Paul.
Reading and other important railroads was
entirely profit taking or liquidation. There
had been very heavy short selling by pro-
fessionals, and the result is that the So
called technical position of the market is
stronger than 1t has been for several days.
Analysis of the selling reveals the fact that
1t had it's origin largely from speculative
quarters. and 1t is only fair to assume that
it represents bearish operations. Our posi-
ton on the market has been, we believe,
very clear and it has not altered In the
least. We believe that stocks will sell con-
siderably higher, and we believe that on
each advance there is the certainty of a
partial reaction.
'Proft-taking on advances is to our mind
the best evidence of conservatism and
conservatism is quite as essential now as
at any time during the speculation of the
past year. BY conservatism we do not
mean timidity, but we mean that sixth
sense OF speculation which is able to dis
Germ the point at which profits should be
garnered, and also at which OH a reaction
stocks should be purchased. This is a
somewhat difficult proposition but ii is
simple enough to remember that every
sharp advance now will be met with the
opposition OF professionals. and set-backs
Will become the rule from time to time. ,
This does not interfere with the ultimate
advance of the market and prevents it from
becoming top heavy. Our position on Union
racine Is unchanged and in view of the
rnn lixrf.1
being circulated, eithe" for bullsh or for
bearish effect. we can only say that we pay
no attention to the dividend whatever The
strength of Union Pacific Is based on some-
thing other than the dividend. and 1t viii
sell eventually at very much higher prices.
But 1t will be subject to the same in
fuences of advances and reaction that affect
other stocks
John H. Davis & Co say In their January
circular
ut is only once in many years that the
financial and business conditions of this or
any other country present an unvarying
front of strength and apparent permanency.
Such Is the situation in this country today
Ind 1t Is difficult TO speak even in terms of
moderation of the extraordinary facts. OF
course, there will be reaction and loan
period sooner or later. Unstinted blessings
and unprecedented prosperity cannot con-
tinue indefinitely. But 50 far as one can
judge the early future there is no serious
check in sight. Some unforeseen and wide
spread disaster is possible to occur and the
higher the level in such a case the more
the shrinkage and loss may be. The in
Eestor who can pay In full for carefully
rejected stocks may take the chance in the
reasonable belief that the ultimate trend is
upward. but the attitude which Is safe for
him is dangerous for the smaller and
weaker man."