The Washington herald., 1906-12-08
WALL STREET NOTES
Money Rates Up, but Relief
Expected from Shaw.
STOCKS, TOO, SHOW ADVANCE
Steel Common One OF the Strongest
on the List, Owing 10 Excellent
Business and Probability of Higher
Prices-Little Fear of Serious Con-
sequences in Z. p. Investigation.

New York, Dec. THE first transaction
in money was made at % per cent. and
about half an hour earlier than the usual
opening of the money market, the early
start showing the eageTness of borrowers
TO obtain funds to carry over until Mon
day. The second transaction seemed to
indicate softenins Of the rates, being at
q per cent. but as it represented only
$1,000, while the first was $1,000 coo. IT only
indicated that the demand was for large
rather than small amounts.
After that quotations began to climb
until soon after II o'clock they reached
36 per cent. but as the rise was accom-
panied by rumors that substantial relief
for the situation would be given by Secre-
tary Shaw in the near future, the prices
Of securities hardened, and the street saw
the unusual occurrence of an advance In
money and in stocks at the same time
Any one who had stocks for sale found a
good market for them, and the effect was
not lost on sentiment.
After the bulk OF the days demand for
money was satisfied, the call rate
dropped of in the afternoon until it finally
went as low as 2 per cent, 20 the disgust
of brokers. who had made their renewals
at 30 per cent in the first hour. There
were all sorts Of rumors of early action
by Secretary Shaw. and leading bankers
said that while they did not know what
form Of relief the Treasury would grant.
they were firmly convinced that the time
had come when action of some kind
should be taken
The expectation seemed to be that on
Monday. unless conditions changed radi-
cally, relief measures would be announced.
The favorite theory was that they would
come in the shape Of retirement Of a large
amount Of the per cent bonds which ma
ture next year. although there was also
story that 25,OO.OO0 OF Treasury funds
might be deposited in the banks here and
in other cities.
If the market continued to show
strength even when money was at the
highest Of the day. it is no wonder that il
advanced substantially when call money
rates dropped TO almost normal figures
United States Steel common, which sold
ex-idividend. was one of the strongest
stocks on the list, not only recovering its
dividend, but making a substantial ad-
vance in addition. The buying was re-
garded as good, and London, which often
has correct information on the stock, took
a considerable amount Of It, The bull
position is not based on expectation Of an
increase in the dividend TO be declared In
January, but on the excellent business
outlook and the probability Of higher
prices In many important lines on finish
ed material. Il Is said that while there
are no longer any pool agreements, II is
likely that the price Of every important
product Of the mills with the exception
of standard steel rails, will be raised TO
Offset the highest cost of labor and other
commodities as we'll as TO allow the
manufacturers themselves a large share
of the prosperity which is showing profits
on every other line of industry.
Resumption Of the buying by Standard
oil interests which made the last upward
movement in the stock. was the principal
factor in the rise In St Paul, but as on
the last occasion nothing was said in the
early stages Of the rise as to the reason
for the bullish attitude taken. the street
being left 10 draw its own differences.
Canadian Pacific showed an advance
the buying was largely executed through
brokers often used by a speculative Oper-
ator. who has made a specially Of this
stock 1t is entirely possible that this
was done so as 10 conceal the real char
acter of the movement
Il seems that the sale of Great North |
ern at 80 at Thursdays opening was a
legitimate transaction after all. the price |
being run up on competitive bidding at a
time when there were no offerings of
stock few minutes later, OF course |
when the news of the transaction reached |
other parts Of the room, stock was sup
piled, and the price dropped quickly.
Few brokers anticipated serious conse- |
quences from the proposed investigation 1
of the Hartman system by the Inter /
state Commerce Commission. The view /
that is taken is that at worst there may
be disclosures regarding the acquisition 1
of lands. which would not mean a great /
deal, except from the moral standpoint, |
and possibly of some rate irregularities /
which might be punished by the impo- /
sition Of fines. As for the fines, they /
could hardly be large enough to make /
any impression in the value of Union Pa /
cific stock. in which a decline of one /
eighth would be a sufficient Offset for /
fines aggregating nearly quarter of 1
million dollars. The question of loss Of /
moral prestige is harder to estimate, for /
there Is hardly any one In the street /
who would know how this Intangible |
asset is valued by the Hartman COM /
panies, especially in view Of the dividend |
episode last summer
If, by any possible chance, Union Pa
cifc could be forced to release control of
Southern Pacific, the effect in the long
run might be greatly to the advantage of |
the latter property. Railroads are not /
by another line for their own
good. but for the benefit which the con-
trolling company may derive from oper-
ltlng them as feeders or auxiliaries.
Southern Pacific being subordinate to
Union Pacific. is forced TO perform the
function of a subordinate to act as
feeder 10 the parent company, ard con-
'ider the interests OF the latter equally
with its own
Mere bigness in a railroad system does
not make it a trust. Neither the Inter
state Commerce Commission nor any 1
court in The land has a right to set
limits to the size of a railroad merger.
provided it does not embrace parallel and Il
lines or constitute a con- Il
;piracy in restraint of trade.
Commission houses which have been /.
iiscOuraging their customers from buving
stock say that from present indications
interest charges for the current month
viii be as high as 10 per cent. At this
ate the carving charge on a stool, .,,t /