The Washington herald., 1907-05-14
Stock Exchange Quiet While
Wheat Holds Boards
THE CLOSE SHOWS FIRMNESS
Union Pacific Heads Securities-Opin-
ion Expressed Road Is Paying High
Must Borrow More Funds at Early
Date-Wiu he No Surplus.


kets were open, that is to say, between
half past 10 and a quarter before ,
o'clock in the afternoon. transactions in
the stock market were Of extremely des-
ultory character. In the first half hour
Of dealings in securities the market was.
as q whole firm, under the leadership of
a sharp upward movement in the Union
Pacific common shares, this being based
partially upon the very open manipula-
ton for an advance, presumably con-
Quoted in the interest OF those having at
heart the success Of the company's new
bond issue and partially upon the cur
rent popular judgment that while the
necessity placed upon the company Of
raising money for the purposes described
is one that ought not 10 have been forced
upon it yet, the terms of the pro-
posed bond sale were such as to make the
plan entirely feasible from a financial
point Of view.
This conclusion was fortified by the an
nouncement late on Saturday that the
Union Pacific Company had paid $.500.OO
Of its S75O0i,O0O bend issue 70 a syndi-
fotatlon of the bends. the managers of
the syndicate also getting an additional
commission Of $4,000 for their services.
This meant. Of course, that large sub
scription to the bonds was probable from
the members Of the syndicate themselves.
irrespective Of the amounts OF the bonds
unsubscribed for by the stockholders
that they might be asked to take up.
Must Borrow More soon.
The fact was put in very clear Hight
that the whole financing plan had been
so closely calculated to the company
immediate and pressing requirements
that the net cash surplus remaining
in the Union Pacific treasury after the
avails Of the new bonds had been ex-
pended would be so small as to entail
further borrowing by the company at a
not very remote date. It also left IL
manifest that although the Union Pacific
Company would undoubtedly get the
money required. it would. if the new
bonds should be converted into common
stock or be retired pay an extremely
high rate Of interest for its accommoda-
tion. But with this view Of the case, Wall
street did not very greatly concern itself
The stock market during the early part
of the stock exchange session. although
generally firm. as described. was heavy
In certain quarters. American Smelling
and Refining shares were under pressure
For. some unknown reason Reading com
mon stock exhibited little ralIying ten
dency. and United States Steel stocks
were weak under sales prompted. SEEM
ingly, by the discussion now in progress
concerning the poor quality, as is alleged,
of the steel rails turned out by com
panies using the modern BeSsemer pro-
cess Of manufacturing the article Dur
ing the remaining portion OF the day, up
TO the last three-quarters Of an hour OF
business. speculative interest was con-
fined almost exclusively TO the sensational
developments on the produce exchanges.
Prices Grow Stronger.
After this, prices Of stocks became
stronger than they had been at any time
previously. and although more than half
Of the days business was concentrated
in Union Pacific and Reading common
shares. and these stocks made net ad-
vances of over 5 points each. gains Of a
point or more took place in most Of the
standard shares.
The reason for the curious course Of the
security market aside from the definite
support extended for especial reasons to
Union Pacific stock. lay open TO all OBJ
servers in the extreme gyratiOns in wheat
prices The weather map for the agTi-
cultural districts to-day was more favor
able than il had been for several weeks
past There were still many reports of
freezing cold weather and so forth from
the Northwest, but the colder tempera-
lures seemed to be gradually receding
nOrthWard. under the impulse of warm
waves from both the South and West.
Nevertheless, another striking advance
in the grain markets in London and
Paris before the opening Of business here
showed that fears Of a deficiency in the
wheat supply this year had become acute,
and a great rise I'm the wheat options in
tie first transactions on the produce ex-
change here and the Chicago Board of
Trade arrested a speculative movement
for the rise in the commodity that had
assumed proportions Of one Of the old
time crazes.
Within a very short time after the be-
ginning of trading i'm wheat. the price Of
the various options rose from lla TO 5
cents over Saturdays last quotations, the
gain last named being in the price Of the
December wheat options. in which deal
ings are as yet small The advance was
continued for a considerable period, and
held until the latter part of the day
when a reaction occurred. but the final
price Of each Of the principal options was
still at a net advance of over cents a
hushel for the day. There was very little
doubt that the large operators who started
the present speculation in wheat several
weeks ago, took profits to-day in large
amounts on their ventures. and the rise OF
over 10 cents a bushel in the price Of the
commodity I'm little more than a week 5
time, and of p cents a bushel from the
time when the advance started. would
seem to have discounted a good deal OF
the crop damage. present and prospective
Condition Is Serious.
It is conceded. however. that a serious
situation confronts the grain trade Re
duced harvests are indicated at the mo-
ment IN nearly ali the worlds great pro
duCinE sections. and in conservative quar-
ters In the trade it does not seem to bt
thought likely that so far as our owr
country Is concerned the shortage esti.
mated I'm wheat as the result Of the back.
wardness Of the season thus far can be
made good during the rest OF the year
In the stock market. after dealings ir
wheat were over. the not unnatural ide9
appeared TO prevail that inasmuch as
prices Of stocks had failed to break upon
the rise in wheat they were due 10 ad-
vance when the boom I'm wheat showed
signs Of elimination.
The Western spectators who have beer
buying wheat recently have also beer
conducting the converse operation Of sell.
ing stocks, and the rise in security prices
to-day in the last hour appeared to be
largely in the nature of a retirement FOR
their account OF contracts for the declina