The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1907-01-21
Financial Letter

New York, Jan. 21.-The stock mar
ket shows considerable effect from the
repeated announcements OF new capital
requirements by the railroads. One
after another the big trunk lines, no
tably the Great Northern, Pennsylvan-
la, Northwestern and Southern make
known that they require funds for
equipment and extension of lines. ALL
of them explain that the need of money
is caused more by superabundance
of prosperity rather than because of
lack of it, yet Wall Street puts an I'M
favorable Interpretation upon the sit
uation and Is inclined to the view
that with proper management the pres
ent state of affairs might have been
averted. Fnanciers and SPECTATORS
alike always attach importance to any
remarks of James j. Hill on railway
questions and they have given much
thought to the interview in which Mr..
Hiss said that more than a billion dol
lars a year for five years would be re-
quired to place the railway lines of
the country in proper shape to handle
the business of the country satisfac-
torily. If Mr. Hill is correct the
problem is to determine where such
vast sums are to come FROM At pres
emit England stands practically in the
position of refusing to lend to AM
erica, she having some difficulties in
her own money market and apparent
ly believing for the moment at least
that her investments in the United
States are large enough. France lent
the Pennsylvania $5OO00,000 some time
ago but has shown no disposition since
to add to her financial ventures here.
AS to the domestic supply, there is
nothing at present to indicate any
great increase. The movement of
currency to New York, usual in jan
uary, has begun but is not in especial
ly great volume-not enough to give
grounds for hope that there will be
large surplus of money for speculative
purposes after the demands of trade
and general business have been salts
fed.
1t is these considerations, all con-
tered around the money market, that
produced the prevalent feeling of eau
ton in the buying of stocks. At pres
ent prices the average railroad snare
does not look attractive as an invest
ment as there are large borrowings
hanging over it with the priority of
the interest on such borrowings over
the claims of the shares for dividends.
OF course, Their are notable exceptions.
Some of the lines appear to be in good,
healthy condition and prepared to
carry on business without having re-
course to the loan market; but this
very fact tends to increase the dis
position to conservatism as regards
others.
The sensitive state of speculation
is we'll illustrated by the effect on SEN
timent of the.recent rumors that j. P.
Morgan is In bad health. Every time
this report has been circulated it has
been denied more or less officially but
the traders sold stocks on it just
the same. It appears that Mr.. Morgan
Is remaining at his residence, most of
the time, but not because of any SER
ious illness. In some quarters his
lack of interest in business Is thought
to be explained by the severe decline
in shares in which he is largely inter-
tested, principally Great Northern and
Southern railway. The latter has been
under pressure ever since the tragic
death Of President Spencer in wreck
on his own line, but the weakness
has been due in the main to the know
ledge that the company has to raise
more capital for the purpose of adj
ditional improvements and equipment
in order to keep pace with its constant
ly increasing business. There also
have been rumors that the dividend
on the preferred stock would be re-
duced. Erie being a Morgan stock,
naturally has declined in sympathy
with Southern railway, but in order
to thelp It along on its downward
course 1t was said that the dividend
on the second preferred would be re-
duced II not entirely suspended and
that the company would have to raise
a large amount Of money for improve
ments. The future of the market be-
yond the day-to-day fluctuations is the
great subject Of discussion at pres
ent. Rallies from each decline are
confidently expected but renewal of
an active bull movement for the long
pull is not SO certain. That the big
Wall Street interests desire such a
movement is not denied. They are
powerful to manipulate prices to a
higher level, but whether they will
be able to sell out their heavy hold
ings at the high prices is another
question. Just at present the invest,
ing public as distinguished from the
spectators is from Missouri and very
much so-they wont believe thing
until they ARE shown"