Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-02-26
BULLS And BEARS

Special Dispatch to The Star.
NEW YORK. February 26-There has
been some wagging OF speculative deals
over the unsatisfactory state Of the mar
ket for bonds. except for issues with spec
ulative features. and rather gloomy
thoughts as to the future of the stock mar
ket have been INDUCED in. Az q matter OF
fact there would be nothing Illogical in .
declining or saggfng market for bonds
whose value was determined by security
and interest yield alone and an advancing
market for speculative bond issues and for
stocks, IL the sagging tendency OF the
higher grade bonds was owing chiefly to .
| rather firm money market. which. in turn.
owed its firmness to great business and
Industrial activity.
With such money market circumstances
as these the equities of stocks and speeu-
lative bonds are probably increasing, and
after all the equities OF stocks and not
their actual dividend yield at the last rate
established tend to determine the market
price of stocks.
II this were not so. non-dividend paying
issues would hardly sell at the levels
which generally obtain for them.
When the convertible bonds OF the Union
Pacific shall all have been converted, and
there Is now only about So, 600, 600 outstand-
ing. fixed charges will have been reduced
by 100000 year. although contingent
charges will have been increased through
conversion by s6.00O,0O0. There is. how
ever, so important difference between
nxed and contingent charges, and the in
ducements for converting bonds into stock
having been so freely offered in the last
two years, that the conclusion is apparent
that the Union Paciiics controlling inter-
ests would hardly be deferred by consider
Ing the addition of 100000 more to con-
tingent charges from issuing gratis to
stockholders the s1oo, 100000 Of preferred
stock authorized last year.
Alfred Baker & Co. of Chicago. members
| OF the New York stock exchange. have put
out circular on Union Pacific, in which
they say:
Union Pacific is earning a larger per-
centage of its market price, nov $50
share, than most other first-class railways.
The conversion of its per cent bonds has
left large amount of free collateral, not
far from s200,000.0o0 which may be used
for corporate purposes. The company's
large equities in other companies will even
tually add greatly to the earnings available
for dividends
Delaware and Hudson rights around are
considered pretty cheap by inside interests
in the company. This figure represents
cost of about 100 for a per cent bond con-
vertible into Delaware and Hudson stock at
200
For Peoples Gas to reflect sympathetically
the decline in Consolidated Gas Is logical,
considering the identity Of certain interests
in the two stocks. Consolidated Gas has
this month broken to its lowest price since
1897. when it sold at 1861 The lowest
price since then, up to this year. was 1853 In
1879. 1t would look though the fall had
discounted lot of the adverse influences at
work now. High price for the stock last
year was PA, reached in March
x*
Should the recommended ton of the Arm
strong committee limiting the amount of
new business that can be written in year
| to s15o,o00,0oo for any life insurance COM
pany in this state be endorsed, it will
| mean, pparently. great increase in
business for many companies from the
| overflow that five companies will be
the stsrins Of and may
panies to take some of the annual surplus
business. Such Limitation will affect the
New York Life. Mutual, Equitable. Metro
politan and Prudential In 1904 taking that
as normal year. since the business did
not suffer from the agitation that upset 1t
| in 1905. these five companies wrote total
| Of about $1,630, 100000 Of new insurance.
If they were limited to 150,OO0,000 apiece
there would be an annual total OF $780,
| 0OO.000 at least which presumably must be
written elsewhere. In still another way the
| smaller insurance companies should gain
| by the Armstrong committees work. and
| that is through the probable limitation Of
| commissions to agents.
|
1t has been said that the limitation OF
| new business will result in great curtail-
! ment in agency forces by the larger COM
panies, especially If commissions are re-
| duced but these trained canvassers would
| be hardly likely to give up the business
with which they are familiar. Probably the
| bulk of the agents which the larger COM
| panies would let go would make contracts
| with other companies, and the reduction of
| commissions would result in stimulating ef-
| forts by the individual agent to write