The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-11-04
GOSSIP or WALL STREET.

Vi Ousiness IN the market. as q whole, was
very small. la no other stock did the trans
actions total $1,000 shares. Union Pacific TAX
ing next place with $4,000. while Amalga-
mated Copper was the only other issue which
crossed the 20. 1000 mark. Many of the traders
were away. and the outside public showed no
disposition to take sides. preferrlng to wait
until after election. TIE only effect OF the
bank statement. which was not as bad as had
been expected. was to increase professional
operations 10 some extent. but the traders
who had profits on the long side were Inclined
70 hive them at the close.
There were two distinct moves in Reading
"a decline and q recovery. The first was
FOR the purpose OF inducing short selling. the
other was q squeeze Of the short interest.
There were JUNIORS. but these were merely
incidental. for the talk OF an increase In the
dividend rate to 10 per cent, or OF an extra
distribution In some form equal to about 10
per cent. on the stock had practically nothing
to do with the rise in the second hour. The
preceding break was largely the result OF
selling by q trader. but as 20 whether he was
acting for another trader OF larger calibre
or for one of the large commission houses
opinions differed widely. Subsequent de-
v~elopments made 1t not improbable that the
stock came from q speculative clique. whose
object wa to encourage the growth OF a
short interest as the most effective means OF
EAlstuk Jne price 10 q nlRner leVet.
Lshigh Valley, whose dividend VIII prob .
ably be raised to Q per cent. at the end Of this
month. IL not listed on the New York Stock
Exchange and speculative interests which
want to use the bullish force OF the prospect
tive increase for market effect apply It to
Reading. arguing that the points Of similarity
between the two properties are 90 numerous
that from the dividend action on the one.
the dividend action on the other may reason
ably be inferred. The -old pool was said
to have resumed operations In Reading.
but this was probably q misconception. It
was true. however. that operators who had
frequently formed pools in the stock had
formed another and begun operations over
again. These operators never stick very long.
but when they are at work there is generally
plenty of business. They are generous dis
pensers Of tips and as It costs no more TO
predict a movement TO IT'S than to $50 they
generally choose the higher ngure. Perhaps
some day they may find a short interest big
enough and stubborn enough to give them
the opportunity to make good.
What little selling OF Brooklyn Rapid Tran
sit resulted from the remarks Of Mr.. Hughes
regarding his attentions to the company II
elected Governor did not sufice TO hold the
stock down. and at the close the early loss
was not only recovered, but q fractional gain
was shown on the day. A broker in touch
with the company's affairs said: Brooklyn
Rapid TRANSIT In not In politics. It's manage
ment is doing all II can to give good accom-
mediation to its patrons. and II Mr.. Hughes
can show how greater facilities can be given
at the bridge or elsewhere the company will
gladly make the change. Brooklyn Rapid
Transit wants only q square deal, but It's man.
agement In too progressive to ignore intelli-
gent suggestion or well Informed criticism"
Bulls on Pennsylvania said the announce
ment that the company intended 20 grant q
voluntary increase In wages to It's employees
was the best kind Of an answer to those who
had argued that the placing of the stock or
a Z per cent. basis was hardly justified by
conditions. The directors. it was said. had
only raised the rate after the fullest consid-
Grafton of the reasons for and against such a
course. Consideration was not only given
20 causes but to consequences. and IL was
asserted that the utmost confidence was felt
in Official quarters that the new rate could
be maintained pending the completion OF
work in progress, and that when this began
TO bring in revenue, a higher basis could be
adopted. If the stock had not made an ade-
quate response to the action taken all the
better, these interests commended, for the
force was reserved for a time when, clear OF
political considerations and the obstacles in
terposed by a comparatively tight money
market, Pennsylvania might be used a. the
leader in a movement of no small proportions.
In raising the dividend to 2 per ce nr. the
Pennsylvania directors at once commit the
company to the distribution of an additional
3.O5O.O 900 a year on the outstanding stock.
A further effect, however, will be to bring in
the 500 900. 900 convertible 81 per cent. bonds.
OF 1912 for conversion and after the stock
has crossed $50 the 500. 600, 900 convertioles
OF 1915. Conversion Of the first named at
I40 will involve the payment OF practically
81, 0OO, 900 a year in dividends on the new
stock, against the 500 600 now paid In interest
on the bonds. Conversion of the 1915 issue
will mean the substitution of t4.686. 900 in
dividends for o.. $50. 900 a year in interest.
Conversion OF both issues will therefore mean
an additional outlay of about 81. 485. 900 a
year. The road will thus incur an immediate
increase OF s3,05O. 900 q year In dividends on
the outstanding stock. a prospective increase
Of 81, 46j, 900 on account OF the conversion OF
bonds and a large amount on account OF
increased wages.
So far the plans Of Pennsylvania to in
crease wages are very tentative and Il IL be-
lieved that the report OF a horizontal Increase
OF 10 per cent. for all classes Of employees
Is incorrect. When an increase of 10 per
cent. on all salaries OF less than 500 q month
was made in 1902 the amount involved was
about 80, OOO, 900 q year, and as the force Is
now larger, q similar rate OF increase m
bracinR all classes might run TO s,OoO,0 900
or 80. 200. 900 a year.
Apuarently the promised wage increase
will about balance the increase In earnings
Of Pennsylvania for the year on which the
higher dividend rate ia based. but comparison
of monthly statements in past years with the
annual reports covering. the same periods
shows that the latter have given a much more
favorable complexion TO results than did the
former through the inclusion OF a number
OF items which from their nature could not
be taken into the monthly return of earn
ing. from operation. Those who know the
Pennsylvania system. thoroughly contend
that there IL an earning Potentially far
greater than wsll Street has ever appreciated.
and as an instance Of h this means IL is
mentioned tina II only the company should
discontinue the policy OF spending large
sums yearly out OF earnings for Improve
nents which might properly be capitalized
IL could In this way save enough TO provide
fully for the proposed change In wage
schedules.
The Pennsylvania Company. which will
have 10 bear tho burden OF the increase In
wages on the lines west of Pittsburg, Ia capital
lied at $40, OOO. 900 and In now on q o per cent.
Af,,Ida,A hal. ThA tnnraaaa IN vyaRaG nm