The Washington herald., 1906-10-26
WALL STREET NOTES.

when asked by a customer what side of
the market he favored REPLIED. The out
side" There were probably q good many
others who felt the same way. but did
not care 10 say 50 for business reasons.
After a decline which had run as high as
10 points in Union Pacific and correspond
ingly high in a number of other stocks,
there was more or less hesitation about
taking te bear side of the market; but as
the public could not be induced to buy.
and as making commissions is a brokers
business, there was quite a little advice TO
sell for q moderate decline 1t is doubt
ful If much commission was secured, BIZ
what little there was favored the side of
the declining prices. so that the tendency
seems TO be toward the formation OF
useful short interest
There has rarely been so much senti-
ment OF the kind that is bullish for the
long pull and bearish for the immediate
future as is now met with in Wall street.
The raid I'm the last few minutes to-day
dislodged more stock than was dislodge~
in an equal space OF time by anything mat
has occurred in The last few days. Less
confident views regarding the political Sit
uation had good deal to do with this.
Wide circulation was given to a bear tip
on Amalgamated Copper, and in the early
afternoon an attack was delivered which
broke the price more than "a point from
the highest record in the morning. but
without forcing out much stock. in some
quarters the reason given for the change
OF front regarding the stock was that good
news was all out. and there was a weak
account which could be forced 10 liqui-
date. In other places there was a some
what more elaborate theory. The money
conditions in England, il WAS argued,
might force a lot Of the metal upon the
market and cause a sympathetic decline
IN the stocks OF all copper companies
The first argument ignored the important
fact that Amalgamated Copper has had
no rise Of Importance In "a long while, and
is now selling where it sold before the
dividend was Increased. The way lie
stock has acted for weeks past has not
been conducive 10 the formation of
weak bull account If anything, il should
have tended 10 induce "a sOld-out cOndi-
tion. As FOR the metal market il is well
known that production has not kept pace
with consumption and ;hat while the ar
vance to above 10 a ton in London was
rapid. it was based much more on the le-
gitimate demand than on speculative Op-
eratiOns The amount speGulatively held
is very small. and it is recognized that
/ even if for speculative purposes a decline
was permitted in normal quotations the
real position of the industry must for
many months continue strong.
/ out Of line with the ;5Sarish rumors on
Amalgamated Copper was report that
dividends on the stocls of Butte and BOs-
ton. "a subsidiary. might soon be re-
+ sumed
I At various times during the day Union
/ Pacific and Southern Pacific sold on an
exact equality from the standpoint of
dividend return, the first named selling
at IS and the latter at 81. or a little
away from those figures. but with the
equality preserved. The firmness which
/ both displayed up 10 the closing raid at
I tracted considerable attention and led
many traders 70 believe that the large
I interests were ready TO lend support at
F prevailing prices a few stop orders were
caught in Union Pacific until the traders
raided the market, but hardly enough TO
F make the effort worth while. As the
closing interviewed while prices were at
the lowest. il was left an open question
whether a good deal could not be accom-
Plished by a continuance Of the bearish
+ operations.
/ Brokers. as q rule. were inclined TO
favor Union Pacific. as against Southern
Pacific. while the prices were on the
same basis as regards dividend yield.
/ The points Of differences which argued in
+ favor Of Union Pacific were that in addi-
. ton 10 being a railroad company. it is a
/ holding company for various valuable Sc
curities, while Southern Pacific has no
/ source of income outside Of the earnings
from its lines. and is itself controlled
corporation. and that Union Pacific al
ways enjoys broader and more active
market than the other stock
When the annual report of the Union
Pacific is made public il viii be seen
that the company was entirely justified
in paying out per cent for the half
year from its income on investments and
that a similar rate can be maintained
hereafter to supplement what is paid out
. of the operating profits Of the road As
. Union Pacific owns $50, 10000 of Southern
. Pacific common stock. the return on this
/ VIII be at the rate OF $4,000 a year. and
with the dividend on the $1S000. 90 pre-
ferred Will make more than S5,I50,GO0. or
not far from the equivalent OF per
cent for Union Pacific common received
from the investment in Southern Pacific
alone
Although the September statement
showed a slight falling off in the earnings
of Jersey Central. the decline was 50
small as to furnish only slight pretext
for the selling of Reading. although some
% the trading element sought to utilize
il in that way. Jersey Central is con-
trolled by Reading. but this was not the
point which the traders wished 70 ac-
centuate when they drew attention to
the falling of in the latter's earnings
The impression they wanted TO create was
that. as Jersey Central, the first of tbs
anthracite companies to publish earnings
Tor the month, had shown a decrease, the
others We're likely 90 show il also. Had
they looked back year or two further
they would have seen how very much
better the latest report is than chat 70,
any corresponding month, except Septem-
Der last year but they did not want tC
do this, as their only concern was t,
create as bad an impression as possible.
A fair-sized following seems TO hav,
been secured in the bear side in Reading
many itaF ms 'ptiit ~ ttAt CttiCiuSioit tia
talk of an anthracite deal was decidedly
premature, to say the least. while the
dividend question would not come M be
fore January. It was further agreed thai
the dividend would hardly be increased
. TO more than 6 per cent. and that thi.
had already been pretty well discounted
by the price OF the stock. The seller.
apparently were not apprehensive Of any
great opposition to a decline proceeding
on the theory that If large interests
wanted TO accumulate stock they wer,
more likely to welcome a recession in the