The Washington herald., 1906-11-15
WALL STREET NOTES
Rise in st. Paul Proves a
Boom to the Entire List.
HARRIMAEs ANSWER READY
should National Government Bring
suit Against Union Pacific Merged
Lines, Prompt Reply VIII BE Made.
ReiteratIOn of RumOrs Regarding
Large Holdings Creates Activity.

New York. Nov. 1i-Those who were
bullish on the market said the rise IN
St. Paul must prove a tremendous factor
in the making Of higher prices, those who
were not long OF stocks expressed the
opinion that the rapidity OF the movement
was bound to exert sn unsettling effect.
Il Ill depended on the point OF view. but
It was generally felt that there rlust be
an important EFFORT one way o. the other.
Among the reasons given for the &c.
vance were that rights would be forth
coming before the end OF the year that
had been q direct short interest IN the
stock, ard that there Was manipulation
to facilitate selling at other points. There
might have been truth IN Gil OF them.
but Il is doubtful II even collectively they
tell the whole truth.
The old story that control OF the CON-
pany has been secured by Southern
Pacific receives no more credence than
when ii was first circulated. Part. at
least, Of the reason for the rise remains
yet to be disclosed.
ST. Paul sold on Monday at 1S9 II Yes
terd8y Il touched 1S4, making a gain from
lowest 10 highest OF 14l-3 points IN two
days Such Ilsc would hardly have been
made without the fun cooperation Of the
largest interests in the property.
Restoration OF the old r,Imor that James
Henry Smith had sold out his holding Of
St Paul and reinyested the proceeds IN
Southern Pacific had something to DO
with the strength in the latter stock, the
assumption being that Mr.. Smith has
been selling St Paul for some reason
not known to the general public
According 20 current rumor the price
by the Standard OIL interests for the
Smith holdings OF St. Paul was above the
present market quotations, the object be
lng. IL Is alleged, to concentrate control
in a few hands, where II might be re-
tained for the maintenance Of harmonious
relations with Union Pacific, Just as the
most cordial kinds OF relation are main
ta!ned between Great Northern and
Northern Pacific without merger or OWL
eTship Of stock in one company b. the
other. but merely through the cOncentra-
ton Of the great mass OF both in the
hands OF the same interests.
a ruuor regarding Union Pacific, which
has at least the merit OF originality, wes
heard yesterday. Apparently. Il found its
inception in g desire 10 show that the
road has not made such extraordinary
p-ohts from operations as would justify
The Federal government in starting an
investigation to determine whether & pro
portion of the earnings should not be paid
over 20 the Treasury OF the United States
in accordance with the terms Of the
charter under which the read vas built
by the old Union Pacific Railway Com
pany.
The story Is that the earnings OF the
road from operation viii be kept separate
from the returns on investments. and tha'
there viii be a readjustmeat Of capital
'zatiou so that stockholders may receive
some kind OF beneficiary certificates en-
J!tliug them 70 participate in tee prosts
from the latter-thsse profits 20 be dis
tributed without regard to the returns
from the operations OF the road, which
would then appear 70 be TO larger than
reasonable return on invested capital
II such a plan Is contemplated the
question may be raised whether the
management is as confident as Il says II
IS that charter provisions binding in the
I'D company. which went into bankrupt
Cy, are no longer in force because the
property. at receivers sale. settled all
government claims against the road. The
probability Is. however. that there IS no
ground for the report Of a subdivision OF
assets. except as a possibility OF the dim
ard distant future.
Whatever imprCbahiiity there may be
IN the story about the separation CT
Union Pacifc's operation from the re-
turns on the companv's Investments II
certainly interested the street. and thu
report that free assets IN the treasury
were worth Ss50.opo,090 TO 500, 10000 was
regarded as not altogether unreasonable
Figuring that as c per cent stock
Union Pacific would be worth 70, and
taking the lower estimate os s250.0On, ,G0
on the equivalent OF S125 share FOR the
treasury assets, a total value OF 2g5 was
given to the comuon stock. against a
present crice o. about iS3.
A trader. who aTgued that the market
was largely the result Of maninulation by
speculative operators. coaterded that the
heaviest advances shown In any stocks
Western houses. which appeared to be
very active IN ST. Paul. Tne advances re
ferTed to were g. - points in ST. Paul com
mon, and points in the preferred, :
points IL Anaconda, 4 10 in United States
Realty, and 3 IL in Louisville and Nash
vile.
It is said that E. II. Hartman has his
answer already for any suit that may be
brought by the Federal government
against the railroads under his control.
1t Is an answer that VIII be unsnswer-
able. To attempt TO cloud the issue n
legal verbiage, no stupid allegiance to rec
ognized forms will mar it. Wow WOW
WOW. with expressive punctuation marks
that's ell.
Now Il Is said that at the meeting of
the Pennsylvania directors, when the divi
dend rate was raised from per cent to