The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-10-15
TIE FINANCIAL SITUATION.

II must be said that 70 an even less degree
than was the csse in the preceding week
we're there any Developments last week
influencing prices OF securities in any nota-
BILE way and that the stock market WAS.
taking the period through and through.
rather dull. This dulness was more marked
in the earlier part OF the week b II vas
later and. indeed, the. market. although
relatively aliet, showed a gradually increas-
ing strength from the beginning ~ the
week 10 its end. II was largely q profes-
sional market, as II has been now Tor nearly
two months past. bur the professional
spectators were at least buying stocks
rather than selling them. and prices dis
played an almost uniformly advancing
tendency. There were. Of course, certain
special reasons for the rise in particular
cases. General Electric stock was favor
ably affected by an impression. which was
sfterwsrd converted into a certainty by
an official announcement, that a new issue
Of stock was to be made on favorable terms
to existing shareholders. Moreover, there
are possibilities that the dividend ratio on
the stock may be increased. h so-called
Hill railway stocks we're legitimately strong
on the conclusion NJ the ore lands lease
TO the United States Steel Corporation;
and all the United states Steel issues ad-
vsnced not only by reason of an under
standing Of the benefits that would accrue
To the corporation by the transaction
regarding the ore lands, but because
~ general knowledge that the earn
ings Of the company are '%continu-
ing TO mount ,p at an enormous rate.
There is talk. very natural under the
circumstances, that the present dividend
distribution on the United States Steel
common shares must be enlarged, and while
few people really expect that any such action
as this will be taken by the directors OF the
corporation in the present year it IL yet
felt that there ia something more than a
fair probability that the United States Steel
common stock will be made a 4 per cent.
dividend payer in the early part Of next
year. Pennsylvania stock reflected Rpreva-
lent belief that the next dividend paid on
it will be at the rate of 7 per cent. per mum
and there was a very definite upward move
ment in the Union Pacific common shares,
based upon general observation. seemingly,
that the price of the stock as one paying
10 per cent. dividends is now greatly below
its value. The full annual report OF the
Union Pacific company for the fiscal year
ended June ~ has not yet been published,
although the annual meeting Of the COM
PAM was held some days ago. For the
story which w5s heard in Wall Street during
the week that the report when it appeared
would oontsin startling disclosures as 10
, the earnings and profits and investments
Of the company there is probably little
foundation. hut that the earnings Of the
Union Pacific company applicable to divi-
dends on the common stock are at least
double the quantity of dividends now dis
tributed is a fact of which there is no doubt
whatever. There are sound reasons for
! thinking. too. that the Union Pacific COM
pany is still a large holder of Northern
Pacific and Great Northern Railway pre-
ferred stock and that it will probably bene-
fit more than any single shareholder Of these
companies from the distribution, at a date
not remote. of the equities in cash form or
otherwise arising from the lease recently
made by the Great Northern and Northern
Pacific companies OF their ore properties,
as well a. of the regular profits OF these
companies arising from their routine opera
tons. Why Union Pacific stock under
these circumstances is not worth fully as
much as Northern Pacific is a little hard to
discover II is, of course, true that one ex-
PLANTATION of the comparatively low market
price of Union Pacific ia that it is less than
three months since revelation was mad Of
the true earning power OF the company
and that the stock was then selling nearly
$50 a share below its present mark; quota
ton. When the stock has, to Use a Wall
Street expression, -digested" this sudden
advance, it is not an unfair presumption that
it's price will move upward to a figure more
in correspondence with the actual value
of the property.
Il was very clear, however, that there
we're certain general forces operating in
the stock market last week from which
the market "a a whole derived a greater
impulse than from any OF the more par
ticular helps that nave been mentioned.
For one thing, confidence became decidedly
enlarged that the ~demaRogio and social
istic candidate for Governor in this State
would be defeated at the November cleo
ton. and IL il shout. indeed turn out. as
IL now promises to, that this candidate
encounters an overwhelmingly adverse
vote, the security market would reflect
it's Joy over the event in a rather sensa-
tional fashion. 1t was indeed very sig
niicant, as rejecting the opinion Of shreyd
SDcNuLAlpEE m w VIVA NiC hCClHiOil VI IA
people was likely to be in the matter, that
the local traction and gas lighting stocks
we're stronger n better bought" from
last Monday to Saturday than they have
been for many months. These stocks
would perhaps suffer more directly by a
Hearst victory than any others; although
they have all fallen 80 greatly during the
last year that there are many good judges
Of the market who think that their selling
price has about discounted any evil thai
in all reasonable likelihood can come tc
them. Again, the ease in the money sit
uation, which began to be noticed in the pre-
ceding week. last week became very pro
nounced. Call money rates throughout
the week rarely rose over 4 per cent, whil'
the 9 per cent. minimum rate for tim,
money, 30 long held, was at last broken
and all sorts Of prices between this figur'
and 6 per cent. were made for time funds
There was knowledge, it is true. Of only
one loan made as low as 5 per cent, anC
this was for six months on collateral o.