The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-02-15
Brooklyn Union and Consolidated
Score Advances ia Last Hour of
TradfnE-AtchisOn Dividend Elk
pected To BE decentralization and
Southern Pacific Unchanged.

,ersal over night Commission houses
reported that there was an almost COM
Dlete absence of public interest and We're
not averse to decline. believing that this
might bring them some business. They
thought the market had been opened up
50 that large operators might sell some
stock and that the reaction might look
all the greater By starting from Ieye!
that was really hctiuiously high
I'm the last hour Of trading the local
gas stocks were alone in showing strength,
both Consolidated and Brooklyn Union
scoring substantial advances. while the
rest OF the market was making the lowest
points OF the day. The rise in the local
lighting issues was based on a rumor that
the companies would win their suits 70 set
aside the operation of the law enforcing
% reduction In the price Of gas from 81
to 80 cents a thousand feet, this story
being embellished with some circum-
stantial detail 20 the effect that on re-
ceiving a favorable decision the COM
panies would voluntarily reduce the price
Of their product to - cents a thousand.
There was. however nothing definite 10
account for the advance except that il
was stated that the Consolidated Gas
Company had received assurances from
some very able lawyers that ii had good
ease. This was hardly new, for. without
assurance of that kind IL is extremely
doubtful If the suits would ever have
been entered upon. All it meant was that
the companies We're still as confident as
they had been when their stocks were
selling materially lower. and that the
large interests did not see anything differ
ent In the conditions was indicated by
the fact that they contributed little OF
nothing 90 the volume Of buying. The
movement originated with the traders
and was by them entirely carried on.
a trader who wanted to be facetitious,
said when Missouri Pacific dropped %
tho lowest point OF the year: They are
wiping the floor with NJ. O. p. again.
and it will have TO be admitted that for
their purpose they have chosen "A very
suitable implement" But NJ. o. F. is not
the ticker abbreviation for Missouri Pa
cinc any more than NJ. X. T. is the
Tor Missouri, Kansas and
Texas. For the decline in Missouri Pa
cific there was outside reason ia the re-
port from Topeka that the Kansas Iegis-
lature would enact a law TO reduce rail-
road rates during its present session.
There were also Tumors similar TO those
heard a week ago about some financing
by the road. but these appeared to have
no more foundation than when they were
lrst heard. and the only real influence Al
work in depressing the stock apart from
the attacks by bearish operators was
the legislative activity which OF course
the management Of the road has M
means Of combating. Were il not for
this factor Missouri Pacific might be ex-
pected to oppose strong resistance 10
the assaults of the bears.
The street has seldom been so confident
Of dividend increase so far in advance
of the period of declaration as ii is nov
that the rate on Atchison common will
be raised to per cent at the directors
meeting in April. It is of course right
TO say that the best information sustains
the confidence felt and as the earnings
certainly warrant an Increase in the rate
there is every reason TO believe that
popular expectation will not be disap-
pointed IN regard To the new financing
however. there Is nothing like the same
unanimlty OF opinion. In some places ii
is said that the road VIII sell s25.0o0.OOO of
convertible bonds, in others that the
sale will be OF common stock, while in
"A few there is talk Of the possibility of 2
sale of S25.00O,00O short-term notes-leav-
ing the matter of permanent financing by
stock or bonds to a future time. Some
well informed interests doubt If any
financing will be resorted to.
If AtchisOn is placed on a per cent
basis. as seems altogether probable, then
it would have no difficulty in disposing OF
either stock or convertible bonds at par
In case convertibIes were offered TO stock
holders at par. and the date of the first
payment was deferred to follow the actual
declaration of semi-annual dividend oil
3 per cent. then the holders Of the war
rants would probably at once convert
these into stock and 10 all intents the
financing would be done with stock with
out any danger whatever of the stock
holders failing to exercise their option.
Nobody expected any change In the Har-
riman dividends, so when the announce
ment was made of declaration at the reg.
ular rate of PIP per cent and per cent fol
the half year on Southern Pacific anC
Union Pacific, respectively. there was No
disappointment. A few brokers may have
expected the publication of the earnings
for the month of January. although it is
hard TO see how they could have counted
on this, as the figures for December wer,
published only a couple Of weeks age. The
traders tried to start an upward move
ment in Union Pacific on the announce
ment. thinking evidently that there haC
been some uncertainty as to whether the
rate established for this stock last Angus
would be maintained but although they
rushed the stock up about point in a few
minutes. they failed to discover any shOr
interest that it is believed was forced Il
run from such ill-directed attacks.
About the time that Union Pacific brok,
below 10 in the week before last there
was some talk that the directors might de
eide that the returns from investment!
were not large enough the last half yea
to warrant the payment Of . per cent from
this source TO supplement the 3 per cen
drawn from the operations Of the rail
roads. and that, therefore. the continue
ton of the 10 per cent rate was not mat
ter of certainaty by any means. 1t woulC
seem, however. that this kind of reasoning
went no further than talk, for had Their,
been any short selling based upon it, th'
shorts. after the announcement of TIT
regular dividend, would probably have
started covering There is an .incorrec
idea that the margin behind the dstrlbu
tons from investments is very slim. No