The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1906-12-19
News of Big Northwestern
Roads Issue Is a Blow.
STOCK BOOKS ARE CLOSED
Reason of Hasty Action Not Salts
factOriIy Explained TO Traders.
Stockholders Nay Demur TO Fur
nishing Such Large sum as Is De-
manded-B. & o. Makes Only Gain.


Paul Railroad Company, thus increasing
the volume of outstanding stock capitan-
cation of the company by nearly three
fourths, to-day gave. ike other previous
announcements of a similar sort recently, a
blow to the speculative stock market. and
the severity Of the shock being the third
Of the kind within week, seemed 10
come upon the market with eliminating
force In many ways the action of the
St. Paul directors took Wall street very
much by surprise. The impression had
become general that a new issue of stock
by the company was impending, but few
people in the financial district seemed to
have any suspicion that such a large
creation of new capital would be made or
that payment upon so considerable pOr-
ton of it as 100000 would be asked
within so short a time as less than fort
night hence, and would be fixed for the
one day upon which the financial strain
incident 10 the end-of-the-year settle
ments would be mostly felt. Neither was
there any sufficient explanation given as
TO the policy of the directors in closing
the books Of the company for the new
stock issue on the day following the time
It was suggested during the day in Wall
street as accounting for this course that
the directors were anxious that the affair
should become finality as soon as posi-
bic in order that possibilities might be
avoided of interference of the new stock
issues by the legal officials OF the State
of Wisconsin of a kind similar to that Of
fered by the law officers of the State of
Minnesota in the case of Great Northern's
recent issue of stock; but this theory was
absurd, inasmuch as the laws OF the state
OF Wisconsin distinctly permit the St
Paul company OF any other railway or
ganization chartered by the State. TO issue
new stock for the purpose Of building new
mileage and, moreover. the mere fact of
the closing of the books Of the company
would not stop any hostile action the
authorities of any State might choose to
take.
Action DemoraIized the Market.
However analysed. the matter to-day
brought about a demoralized stock mar
ket. Prices of securities. notably the
high-priced and standard railway shares.
declined almost continuously. Pressure
to sell St. Paul common stock was great
est and ii produced an extreme decline in
the price of the stock OF 1875 points from
it's highest price yesterday. and OF il
points from yesterdays closing figures.
\ slight advance in the last one or two
transactions in the stock made the net de-
cline little less Likewise. the Northern
Pacific shares fell from POS. their yester-
days closing price. 10 200; Great Northern
preferred from 21O to 1892 and Union Pa
ciic from Isl to 1902. Other large net de-
clines to-day were Delaware and Hudson:
2E points in Chicago and Northwestern
common, and points IN Anaconda
There were few favored stocks that did
not fan a fun point or more, and the ac-
tiyity of the market was such as to bring
the total dealings in stocks up 20 nearly
100000 shares, a volume Of dealings that
has not been equalled for several weeks.
b. & o. Makes Strong Gain.
The one feature of the strength in the
market was Baltimore and Ohio common
stock, which rose at one time 81 points
and retained more than one-third of its
advance. For this phenomenon, current
stories were TO the effect that a large new
issue Of Baltimore and Ohio stock, with
rights" was approaching, and that an
advance in the company's right of divi-
dend distributions on its common shares
was medtated.
not unsoUndIy assigned, for the break in
the shares of the Northwestern Railroad
Companies to-day, and for the conse-
Queut weakness in the general market,
was that the price OF Northern Pacific.
Great Northern preferred. and St Paul
common stocks had recently been pushed
so high that even after the current rights
accruing upon them had been deducted
from their market valuation. quotations
for the stocks would still stand at levels
high for those Of merely per cent divi-
dent-paying stocks. IF such a money mar
ket should continue as has prevailed dur
ing the last three or four months.
stockholders May Hesitate.
Added to this was doubt as to the will
ingness OF the rank and file Of the large
number OF stockholders in these COM
panies TO provide the more than $780,
100000 Of new capital asked for, and ques-
tions as to the effect upon the general
money market of such new provision. as
Stunning that it was promptly made. Such
inquiries could not be avoided in view Of
the drop in the outside market of the
price Of the St Paul rights from 30 to
$50 of those Of the Northern Pacific to-
day to . from 49, and in the quotation for
the Great Northern privileges Of Il
originally offered.
No doubt. too. the weakness of the
market to-day was greatly intensified by
renewed Stringency IN the immediate
money situation. The London marker
was upset by an advance in the Imperial
Bank Of Germany's discount rate from 6
to : per cent, thus forcing the Reichstag
Banks prices for accommodation 10 a
figure never touched bat once before.
Although such action had been pretty
generally anticipated. it produced heavy
selling of stocks in London, and caused
decline in the price or consols and other
leading securities besides inducing a sharp
advance in discounts in the open market.
Call Money Advanced Steadily.
The opening price for call money here
was Is per cent. and bank renewals were
made during the morning hours at rates
that, though varying. averaged about
49, per cent, as against yesterdays rate
of uh per cent. From then on. money
rates moved steadily upward until . per
cent was paid in the last hour. the clos
ing rate being % per cent Disappoint-
ment felt over monetary conditions in
speculative circles was acute. inasn1uch
as there had been almost universal expec-
tatiOn that before this time the beneficial
results OF the treasury's recent relief
measures would be experienced
Instead Of growing easy, the money. sit
uation has, apparently, become more rig
oroUs. All sorts Of extreme bids were re-
ported to-day as having been made for
time money for various periods. the fact
being that very little money of this sort
is offering on any terms
High prices We're bid to-day for money
for six months use upon all Industrial
collateral. although of a good class. and
per cent was paid for money for use for
thirteen months l1pou security, of fba ~