The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1906-12-23
STOCK MARKET
IS DEPRESSED
Heavy Unloading Carried the
Whole List Down to the.
End of Trading.
BIG FAILURE ANNOUNCED
BANK STATEMENT ALSO PROVED
DISAPPOINTING.
BIG FAILURE ANNOUNCED

New York, Dec. 22.-Reading was acute
" depressed in today's stock market and
the heavy unloading of the stock was un-
explained by any special news until the
announcement of the failure of a house
with stock exchange connections and q
branch office in Philadelphia 1t is sup
posed that some large accounts in Read
Ing we're carried by the house. The whole
list was affected in sympathy. but to
moderate extent in comparison until the
nnal break in the market after the fail
ure was announced. Traders Joined in
the selling of Reading under the SUPPOSE
tlon that the heavy speculative liquida-
lion was based on disappointment over
the failure to raise the dividend rate on
the stock. The Hill stocks, Union Pa
eific, St Paul and orthwestern. showed
renewal of the weakness which has
AFFECTED them ever since the new stock
issues OF northwestern railroads was an
nOunced.
The weakness of the market was ag-
Eravated after the appearance of the
bank statement All of the expected gain
IN cash was reported, but the meager
loan contraction was a disappointment
reduction of the loan account of less
tnan half a million dollars was regard
ed as an Inadequate result to be shown
stter the painful liquidation which has
oeen going on in the stock market dur
Ing the week. The withdrawal of gold
from the bank of England for Egyptian
account was renewed. The approach of
the critical stage in the dispute over
wages OF yardmen in the neighborhood
OF New York was a cOntributory cause of
weakness The selling movement effec-
tualiy broke up the dullness of the early
tFaaing which is usual on the eve of a
Total sales of bonds, par value. 1856, OOO
Review of the Week.
Speculative holdings of stocks have had
z sharn shaking out this week and the
liquidation has afforded some relief 10
the money situation and has been re-
1lected in the quiet stock market which
snsued- The great issues of new capital
ny the northwestern railroad companies
nave been foremost influence, the ST.
Paul issue this week coming on ton of
The Great Northern and Northern Pa
enc issues, and seemingly with cumu-
iatlVe effect Those stocks have been
the center of the speculation and have
borne the brunt of the selling pressure.
The Threatened aggravation of the money
pinch as an effect of these offerings had
It's share in the influence they exer-
cised, but the question of dilution of
capital in its effect on the proportion
ate claim of the shares to earnings was
also taken into consideration. The $780,
$1,000 OF new St Paul stock and the 500
eD.Wo OF Great Northern preferred. and
the S93.C00.000 of Northern Pacific. in
gate.
Peculiar causes are RECOGNIZED as mart
~ responsible for the extreme weakness
In the stocks which has followed the an
nouncements of these large additions to
capital but the significance of the bear
ing OF the episode on the market senti-
ment towards such a large capital expan-
sion is beyond dispute. 1t has been the
general SuppOsition that the terms of the
subscription and delayed issue for the
Great Northern and Northern Pacific
stock were not realized by the Hartman
interests Payment of interest on the
subscription installments as paid with
the Issue OF the stock deferred for more
than year makes the Union Pacific
treasury. in effect, lender of capital
for the use of its business rivals 1t is
this condition which gave ground for the
suppositiOn that the Union Pacific hold
ings of Great Northern preferred and
Northern Pacific We're coming on the
market, with insiders indisposed to sup
port the stocks Il was hoped that the
reception of the ST. Paul issue would be
more favorable as being free from this
complication. The violent slump in that
stock, therefore. weakened confidence in
the ability of the market to absorb such
heavy capital offerings. But there were
complicating factors also in this issue
In fact there has been no financial
transaction in New York for many years
that has come in for so much criticism as
the St Paul stock issue. The features
especially objected to We're the short no
lice given of the closing of the books
Tor subscriptions to the new stock and
the provision for payment of a 81 O00 900
decrease of subscriptions on Dee 81, in
the crisis of the strain of the year and
books occurred on the second day after
the announcement of the plan.
There were difficulties involved also
about the issuance of warrants for the
subscriptions and their division for dis
tribution by brokers among their clients
The disgruntlement caused by these in
conveniences was believed TO account for
much OF the unloading of the stock. 1t
was pointed out. also. that the dates
fixed for payment of successive INSTALL
ments on the St. Paul subscriptions in
al,.Nr.
ciai pressure on money markets and not
calculated to conserve stability of in
Jerest rates. The market discussion of
the incident was tinctured with many
expressions of suspicion of the motives of
these arrangements. in the belief that
they were not calculated TO benefit OF
protect stock market operations The
ceierred payments by iRstallments for ali
three of these large stock issues. while
calculated TO save the immediate money
market from strain, insure recurring re-
quirements on the market which must
be reckoned with in the calculation of
money conditions all through the COM
ing year and into the next. This pros
pect OF enormous capital expansion has
given point TO the discussion of the in
tersecting periods and occasional show
Ing of actual decreases Meantime the
rising course of operating expenses and
the heavy additions involved in coming
wage Increases threatens inroads upou
the proportion of gross available as net
earnings The increasing authority ex-
ercised by the government over railroad
charges is regarded as giving small
chance for raising rates This disposition
manifested BY the government authori-
ties to intervene in an effort TO correct
the troubles from car shortages gave rise
TO increased apprehension over this
phase of the outlook.
Except for the relief effected by the
weeks liquidation, the course of the
money market has proved disappointing
Bonds have been dull and heavy
L s. rs advanced 3 and the new as
declined 4 per cent on call during the
week