The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-03-06
WALL STREET NOTES
Market Rules Heavy, Despite
Favorable Reports.
NO CAUSE FOR DEPRESSION
General Business OF the Country SO
Good that Drop in stocks should
3. Create No AIaFm-COm Ac-
tfVfty shows Little Falling on.
Market Rally Soon Ends.

New York. March 5.-The temper Of the
street was fairly well indicated by the
fact that nobody paid any attention to
the annual report of the Pennsylvania
Railroad. In all respects the report was
favorable showing that there was a wide
margin Of safety for the dividend; but the
traders had little use for anything of
that kind. They had a keen appetite for
whatever might be bearish, bat nothing
else was relished by them. or could In
terest them at all. This is what sener-
ally happens when the market is running
70 extremes in either direction. Specu-
lators eXaggerate the Importance Of one
set Of circumstances and totally disTe-
gard the other until it accumulates d
force that completely overwhelms them.
Jost now all the favorable factors in the
situation are dlsregarded by the great
body OF traders, but they exist just the
same, and will in time assert themselves.
Those who argue that the general bust
ness OF the country is about 10 suffer
serious contraction seem to forget that
there is an essential difference between
the present and previous occasions, when
a lessen.ng of commercial activities was
threatened. About the only sign OF a let
up SO far noticeable is in the policy OF
several OF the large railroad systems 10
suspend Improvement work on account
of the difficulty Of obtaining the money
to carry out their schemes Of expansion
OH
d0ned because il is unnecessary or be-
cause il was originally conceived in a
spirit of extravaganza. but because the
conditions in the labor market and the
money market are such as TO present a
serious obstacle to its completion. Both
these conditions can be cured by a slow
ing down of the feverish activity in the
general business of the country. and
when they are cured there viii be- the
deferred business 10 set the wheels ac-
lively revolving again.
If it could be contended that business
was about TO drop off because enterprises
had been completed and gave little
promise Of paying returns on their cost,
then indeed the outlook would be dis
e0uraglug, but what the country is face
To face with at present, according TO the
testimony Of railroad men. is the saving
of a large part OF the business of the
present that it may give impulse to a re-
yivai Of activity at a later period when
certain conditions which are now abb
normal, have gone through process of
readjustmeut
Announcement was made early I'm the
day of the Reading bond issue that had
been talked Of at the end of last week.
and it was not Of the sale of 100000 or
s., 10000 or $5000.OoJ of new obligations
as had al times figured in the rumors,
but Of So. 90 of subway bonds 20 Teim-
burse the company for payment made on
account of construction of the subway on
Pennsylvania avenue. Philadelphia. for
part Of which the Philadelphia and Read
ing Railroad is liable. That any larger
issue is contemplated was again denied
by well-infomed interests.
When bearlsh operations were aggrcs-
svely resumed in the second hour. "a new
group of stocks was chosen as the par
ticular objects Of attack, the first Of these
being Atchison. the Coppers. the Harri-
man issues, and United States Steel, fol
lowing. and ultimately, with few excep-
lions. the general list. When the Copper
and Steel stocks gave way. some opera
tors said this was probably the last grand
drive. as these issues. according 20 their
observations, had often been received FOR
use at the end of a movement becaus.
of the effect which they always exert on
sentiment from the fact that public inter
est in them is very large. 1t could not be-
said. however. that there was any indi-
cation at the close that the end OF the
decline had been reached.
Atchison as a . per cent stock was
when the attack began, selling out of line
with other railroad common stocks pay
ing similar rate Of dividend. The
|ostensibIe reason for the relative strength
OF the stock up to that time was the
alleged probability of an increase in tn,
dividend rate to be declared in April. but
/ IN view Of all the talk Of a falling of
/ in business and the difficulty OF obtain
/ ing money for carrying on improvement
work, the chances for an increase in the
amount of dividend disbursements be
/ fore fall HAD come To be regarded by
| many people as very slim indeed
! For the break in Southern Pacific there
was no other explanation than liquidation
was in progress. The stock dropped to q
I level where the yield on the market price
/ is per cent of the same as on Union Pa.
ciic, and while there is some talk that IN,
/ 10 per cent rate on the latter cannot Do
! regarded as permanent, there seems 10 b,
no doubt whatever us TO the permanency
of the other The selling of Southern Pa.
/ CifiC bore all the eaTmarks of liquidation
/ by large holders. but this does not neces
sarily imply that losses are being takeT
I on most of the stock sold, for those who
/ accumulated large quantities Of it las
year previous to the declaration of tn,
dividend can afford to sell even at tht
present prices. and yet average consider
able profits.
/ One consolation to be derived from tn,
action Of the market is that the lower
prices will probably induce an increase OF
public interest with the return of conf
dence