New-York tribune., 1907-11-24
STOCK MARKET OPERATIONS.


ing issues in yesterdays market, buying repre-
senting in great part the covering of short con-
tracts and TO extent investment purchases,
the latter coming from interests who apparently
were attracted by the low prices prevailing and
by the advice of their brokers to buy stocks for
cash irrespective of money market conditions.
Sentiment regarding the position of money was
helped by the reassuring announcement from
Washington Of the large subscriptions for the
government per cent receipts of Indebtedness
and the decision of the Secretary of the Treas
ury TO permit banks to retain % per cent of the
purchase price of the certificates in their vaults.
which, together with the new circulation based
on these certificates. will add materially 10 the
amount of money available for credit facilities.
Advances of from l to points were common
throughout the list. and though there was some
active distribution at the high levels OF the day,
recessions from the best prices were unim-
portant, the greater number of issues closing
near the top. Floor traders were more buliSh
than they had been in several weeks, their atti-
tude being strengthened by the heavy buying by
the So-called uptown bear element in Reading.
Union Pacific. St. Paul. Shelters, Amalgamated
Copper and Brooklyn Rapid Transit. United
States Steel common came out in round amounts
when the price touched "a, the selling. accord
ing to some market authorities, representing the
intention of substantial operators 10 check the
advance in order to accumulate large lines be-
tween ID and "a. This issue has received good
support in the neighborhood of 22. and il is
quite probable 1t is becoming daily more strongly
ntTencned IN the ndnQS or DONeT1ul w dl street
interests. The bank statement published after
the close of business showed further small in
crease in the deficit in the legal reserve, de-
crease in cash smaller than indicated in Fri
days preliminary estimate. reduction in loans
of S4,0l2,OO0, increase in circulation of
So. .423, 900 and decrease in net deposits Of
SO. 9.4S5,OO0 The contraction in loans, though
small, followed several weeks of heavy expan-
sion, and the most encouraging feature Of
the return. It may be well to note, however.
haf S1OS O90 (hlO in
of deposits and that further material reduction
in the first named item will have to take place
before conditions will be a normal basis
The deficit in the reserve now stands at $54.-
1O3.60O. compared with surplus at this time a
year ago of 4,403 425 and a surplus In 1903 Of
S9,157,1O0. 1t was estimated yesterday that the
amount of Clearing House certificates Outstand-
ing aggregates S75OOOO00
While II is believed there Will be further
forced liquidation in the securities market, It
should be borne in mind the short interest Is
large, that forced selling already has been ex-
tensive that many stocks have passed from the
hands of the weak to those of the strong and
that prices are far below the actual worth of
the issues. even assuming there may be period
of lower dividends 1t doubtless will take q
long time before affairs become readjusted to
the new conditions that have developed in the
money and business world, but in the mean
time excellent opportunities will be afforded in
vestors for the purchase OF first class stocks
and bonds and the advice is freely given by
the most conservative bankers in the Street
to buy at the current level. The technical posi-
ton Of the market may lead to a further sharp
rally at any moment. and short sales, therefore,
are not attractive at this particular time. Bear
operators pointing TO indications of a period
of lower railroad earnings and contraction in
all lines of business for further ma
terial declines in values, but they do not point
out the fact that lighter earnings will compare
with enormous gains in the last few years. nor
do they call attention to the fact that in the
case Of the greater number of companies large
proportion of gross and net earnings could be
lost without endangering dividend returns. 1t
is estimated that the Southern Pacific. for in
stance, could lose one-quarter of its gross earn
ings from its recent rate of receipts and still
maintain dividends while in many parts of the
list of leading transportation companies analy-
sis of results in the last two years will show
that it would require substantial shrinkage in
returns 10 bring net earnings below dividend
requirements. There are some companies, how
ever. that may have to reduce their rate of dis
bursements to their stockholders but these in
stances not general and represent roads
that have placed their dividends on level not
warranted by earnings. especially in the case of
roads that have increased dividends in the hope
of making attractive market for the sale OF
new securities.
There a few bears on United States Steel
preferred and the preferred industrial stocks
throughout the list but at present prices of
these issues bear arguments not convincing
The United States Steel Company has enjoyed
several years of record breaking earnings. II
has placed in its property from earnings in the
last year upward of S50.o00,0O0. and still has
hand an enormous cash balance. In the poorest
years earnings of this big corporation win be
large enough 10 pay dividends on the preferred
without encroaching on the surplus The very
cheap stocks worth watching and buying.
ST. Louis and San Francisco second preferred.
which is entitled to per cent dividends. sold
last week at %. and at that price was consid-
cred cheap, though dividends have not been
pad this year. The company's surplus for the
last fiscal year. after dividends on the first pre-
ferred was S3.95s.S41, and the outstanding
second preferred stock amounts TO only Sis