Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-05-12
Weeks Events Unpropitious to
Values of Securities.
SHARP DECLINES NOTED
Dealings Were Small for the Most Of
the Time.
MONEY MARKET CLOSED STRONG
Advance of Wheat Depressed Stocks
DISQUALIFICATION Pacific and N. Y.
Central Features of Week.

Central Features of Week.
NEW YORK. May 1.-THE stock market
today showed the effect of mixed influences
at work and also reflected the diversion
of speculative activity to the grain and
cotton markets In the scantness of the
dealings. The soaring of the price of wheat
was depressing factor in stocks, and
checked for a time upward tendency
which had developed in sympathy with the
strength of Union Pacific. Opinions on the
wheat crop Influenced not only by the
damage shown in the governments report
of May 1 conditions published yesterday,
but by the fears of further damage since
that time. in view of the unfavorable wealth
er conditions which have prevailed The
continued delay from the same cause in the
seeding of the spring wheat crop adds to
the anxiety caused by the condition of the
winter wheat crop.
The bank statement showed a greater loss
of cash than indicated by the preliminary
estimates, but the considerable loan
duction- was well received in view of the
known demands of syndicate requirements
during the week. 1t Is inferred that the
higher interest rates have attracted re-
newed offerings of funds in this market
by interior banks, with the result that de-
mands local banking resources are
relieved. The money market has been
stronger since Thursday. owing to the
announcement of the Union Pacific financial
plan and the supposition that other Offer
ings by railroad companies are imminent.
Rumors persisted of an intended bond Is
sue by the Reading, and the pressure on
that stock depressed the whole market.
American Smelling also was under some
special pressure. The strength Of Union
Pacific was attributed to a more favor
able view of the financial plan from the
standpoint of financial advantage to the
company as distinguished from the immedi-
ate value of subscription rights to stock
holders. The net changes in prices are
small generally. but gains predominant,
and the closing tone was strong. Total
sales OF bonds. par value, s446OOO.
Mostly Professional Trading.
Events OF the week have been unpropi-
tious to values of securities. and sharp de-
cltnes have occurred. There was no broad
participation in the market. and dealings
were small for most of the time and at
tributedS almost wholly to professional ORR
gin. Aqfew speculative favorites absorbed
an overwhelming proportion Of the total
dealings, and the reactionary tendency in
these yeas decisive in its sympathetic effect
on the whole market. The downward move
ment in these few leaders was due In no
small part to the culmina ton, of a previous
movement for the advance, which had
failed to carry conviction of genuineness
and substantial character. s--...I
There were special points of weakness in
the list also due to individual causes but
which offered suggestions of tendencies in
general conditions which were not encour-
aging 20 hopes OF higher prices. New York
Central was conspicuous instance. This
stock suffered heavy decline on account
of the consideration given to its statement
'.of earnings for the March quarter, In which
the enormous expansion of operating cost
was seen to have overbalanced the increase
In gross earnings to an extent sufficient to
leave deficit OF considerably over $2,000,-
900 below the requirements for the present
dividend rate for that period. From this 1t
was argued that the integrity of the pres
ent dividend was endangered.
A Depressing Incident
The incident was depressing to railroad
stocks In general, owing to the differences
drawn of the large requirements to be met
for increased operating cost by all railroads
Its effect was partly modified later by the
handsome increase in gross earnings for
April reported by the same company, the
increase being at rate sufficient to offset
the rate Of increase In expenses shown by
the previous quarterly statement. There
was much discussion also as to the items
which might figure in the increased ex-
penses. regarding which no official infor-
nation was forthcoming Suggestions Of
special charges which might be included
embraced. share of the outlay making by
the company for improvements and some
damage claims growing out OF accidents.
The early depression in New York Cen
trail was aggravated also by the belief that
large capital requirements remained to be
met, which would necessitate early issue
OF additional securities
The subject of capital requirements was
brought into the forefront of discussion
later in the week by the announcement Of
the financial plans Of the Hartman Pacifics.
The first fragmentary reports of this plan
which reached the financial community
caused acute depression in the stocks I'M
mediately affected. which was commune
Gated In less degree TO the whole list. The
volume Of the new issues in themselves
made formidable impression on sentiment.
The SIS, 900. 900 of Union Pacific convertible
bonds which make up the total of the i'm
mediately intended issue by that company.
although they are to be offered at 3d. still
represent demand largely I'm excess of the
supposed needs OF that company.
Furthermore, the proposed authorization
more than doubly sufficient for the con-
version privilege of the bonds at 175 for the
stock. Beyond this there was the sugges-
ton of a possible large bond issue against
unmortgaged mileage OF the road.
In view OF these considerations the addi-
ton of s36,OO0,Ooo OF Southern Pacific pre-
ferred stock to the intended emissions of
which there had been no intimation in the
preliminary rumors concerning the opera
ton. had a cumulative effect on sentiment
The nature of the subscription privileges
themselves proved disappointing to some
speculative anticipations.
The Union Pacific Plan
The force of the first unfavorable i'm
preston of the Union Pacific plan was
modified to some extent by ripper consdera-
ton. which took more account OF the llmi-
tation of the proposed new stock to the
conversion requirements Of the bonds of the
large element OF refunding of floating IN
debtedness involved in the plan and of the
fact that much OF Southern Pacihc's obli-
cations. for which provision is sought, is to
the parent company, Union Pacific. The
plan thus presented itself as. in some sort
desirable alternative to the more tenn
pordry expedients OF note issues which
have been necessity for raising capital
Tor some time past, and to be accepted
therefore, as possibly sign of improve
ment in the attitude Of capItal toward