The Washington herald., 1906-12-06
WALL STREET NOTES
Secretary Shaw'S Nod Re-
lieVeS Stock Market.
SEES NO NEED OF GIVING AID
Says Business Is All Right. md His
Optimism Results in "A Quick Re-
Action of New York Centrai Di-
rectOrs in Raising Rates.

Action of New York rentrai Di-
rectOrs in Raising Rates.
New York. Dec. 5-'Uniess you see
signs and wonders you will not believe, 3"
and there are still doubling Thomases, q"
who disregard the sign, wonder at a
strong market. despite 30 per cent money,
and refuse 20 believe that Secretary Shaw
viii do something TO relieve the situation.
With SIS GOO in the Treasury, which the
says he viii use IN case of need
and with New York absorbing money
from all parts Of the country, and from
all lines Of trade. bankers think It is only
a question Of time until in some form or
another relief is extended.
The National City Bank managed to
find some money to lend, and put out a
quantity at per cent. when other lend
ers were charging 30 per cent. The effect
was 20 ease the situation somewhat, al
though the decline in the rate at the
close might have occurred anyway. as
most brokers had covered their require
l4AAAtt0 BNlUAE AAlN JAIN OtSdA 10 blLFt
funds
A little before the word came from
Washington that Secretary Shaw could
see no need of relief Tor the money sltu9-
tion. and the stock market at once began
to show strength. Where the logic Of
this lay it would be hard to determine
But a similar cause produced a ike CT
feet in the past, so that in the present
instance there was precedent, II not al
explanation. Perhaps the street conclud-
ed that because Mr.. Shaw could see no
need there was none, and that after all
IL made little difference whether money
was at 4, II. or ~ per cent. The close
showed a tendency to recover early losses.
Unless there is a distinct change in the
money situation before long. brokers
charges for carrying stocks will be high
CT for the current month than at any time
in several years. Referring 20 the impor-
tation Of about sc OC0, goo gold by the banks
in the current year with the aid Of Cle
Treasury. Secretary Shaw says in his re-
port TO Congress that the importing banks
lost in the transactions several thousand
dollars. as established by their books. but
that great benefit was conferred upon the
business interests Of the country. Can
any one doubt after this that the New
York national banks are philanthropic in
Current rumor on Reading is that in ad-
dition to declaring the semi-annuaI divi-
dend the directors will, at their meeting
this month, vote an extra distribution Of
per cent on the common stock.
As everybody expected an increase in
the New York Central dividend. the ac-
tual announcement Of the directors action
in raising the rate from to per cent a
year was principally without interest in a
stock market. Whatever may have been
the reason which determined those be-
hind the movement in the stock to make
IL In advance rather than after the
declaration of the dividend. there was lit
tie doubt that they were ready TO ta0e
their profits on the publication Of the good
news.
An effort was made to stimulate buying
by directing attention 10 the changes in
the official staff Of the road, which. it was
said. would mean great deal in the ef-
dciency of the operating department, but
the street was not looking for news SO
much after the dividend became known
rs for signs Of accumulation. Instead OF
this it found. or thought it found indica-
lions Of distribution. and under Such cir
the predictions Of a rise to
10 did not carry much weight.
On November 10 New York Central
sold as low as 126, so that the rise since
that time represents a fair profit in a
little more than three weeks, even with
full allowance in the matter Of high car
rying charges for those who had early
regarding the change in the
roads dividend policy.
1t is. of course true that I26 was
an unusually low level for New York
Central, being the lowest of the present
year. and 50 IA points under the highest
figure touched in January. and it seems
entirely likely that the stock was per
mitted to drop 10 facilitate accumulation
TO the rise that has since
taken place.
In September, before the value of the
rights was deducted from the price OF
the stock. the price was as high as l4i
or thereabOuts, and on the day when the
stock first sold eX-Tights it ruled around
l39. There had been some expectation Of
IN increase in the dividend rate pre-
,eding the action of the directors or The
question in September. a fact which pos
sibly had a deal to do with the advance
in the price at that time. and that in
stance, as in the present per cent
basis was discounted before il was actu-
ally adopted,
If New York Central three months ago
sold at 40 or thereabouts, with the value
IF the rights deducted on the mere ex-
DectatOn, there is room for a good deal
Of speculation as to why it is unable 10
get up to the same level after the hoped
FOR change in the company's policy has
been brought about The easiest expla-
nation is of course, that the money situ-
alton acts as a clog upon the stock move
nents. but it is also not only possible.
)ut quite probable, the dividend increase
IRE losing their force as makers of bull
sh sentiment.
Wall street shows a growing inclination
% regard earnings rather than rate OF
dividend as the determining factor in the
value of stock. and the earnings and
equities of New York Central have so
ong been studied that the financial COM
nunity in a large measure prepared it.
self months ago for an increase in the
dividend rate.
some interests, knowing tilat an IN
.rease was inevitable. worked the stock
'Or all there was in it early in the fall.
n the fullest confidence that if they
allied to dispose of their accumulated
!clGings At that time they would have
he benefit Of a higher dividend sooner
IT later to help their operations. Every
iuch movement however. lessened the
-itality Of the stock as a medium of
,ullish speculation, and the present COM
'aratively small response TO news of a
favorable character is the re-