The Washington herald., 1907-05-12

Z
would be convertible on such terms as to
make them the medium OF rights worth
having, and as for the bonds themselves
It was predicted that they would be the
very hottest thing in the way Of a spec
ulatlve investment" that had come into
Wall street in many months. Nowhere.
however, was there any attempt TO fore
/ cast the exact terms on which conversion
would be provided for. Estimates Of the
size of the. alleged issue ran as high as
$40, ,OC0, 600 although there was a pretty
general disposition TO regard this as too
high
Possibly the reason why some OF the
bulls on Reading profess to believe that
an issue OF bonds win be made before
long is that. being committed to the long
/ side. they think it best 10 put a good
/ construction on the possibility which the
/ bears seem 70 regard as their principal
argument The bull position IS that the
worst that can come VIII not be unfa-
vorable 10 their operations. About all that
has been going en- in Reading for some
/ time past has been the most powerful
/ kind of play for turns, and as long as
/ the stock continues 10 yield as we'll on
such operations as il has done recently.
/ there is apt to be a variety of rumOr
some OF IL more or less Ingenious.
/ Near the close of the session the rumor
/ got around that the Reading earnings for
/ the month Of a prH would show an increase
/ OF more than 81 .0006C0 as compared with
/ the corresponding month last year This
! was regarded as not unreasonable, he
cause the comp2ny's coal output last
month surpassed all previous records.
while the earnings, compared with the
month a year ago, when the mines were
! closed down for sever,h days on ac-
count OF the labor difficulty. will ap-
/ pear all the more favorable.
/ Almost every bl oker bad a tip 10 buy
/ Union Pacific for a bis rise Some OF
/ them acted upon it ana went home long
/ of the stock. Wherever the inspiration
came from it appeared to have made
many believers. and the words of the
prophet were passed AROUND and re-
| echoed with a zeal well worthy of so
good a cause. Those who did not believe
/ what they heard were given ocular dem
! onstration that something OF unusual inn
I portance WAS under way
/ The buying had a most significant ap-
/ Ipearance. In the crowd were brokers
who usually get a good share of the
Standard oil business, others supposed to
/ represent q prominent banking house in
I terested in the property, and still others
wno have always been credited with the
execution of Hartman business. Here
were the representatives OF large interests
in the property, and all of them bidding
fos the stock
/ Nothing more convincing. il might he
/ supposed, could be desired by the trading
element; but the trader is prone TO skepti-
cism; his experience makes him so. and
when he saw such an appearance OF coed
buying he began to question why the in
siders should he so willing to let it become
known that they We're 5uyirg the stock
He made un his mind that what he saw
was manipulation. but Of a kind that it
might be dangerous TO oppose.
/ That the technical position of Union
Pacific Is strong, some Of the closest OBJ
servers of the stock on the floor of the
exchange very firmly believe. Their be
lief is that the stock had been heavily
sold on the prospect of a bad crop report.
that additional short lines We're put out
on the announcement of the new fnanc-
ing, and that instead of covering up the
bears have increased their compliments
or tue ground that the sharp rise in
wheat indicates further serious deteriora-
ton Of the growing crops
Now that the underwriting has been
/ arranged for. il is regarded as not at all
unlikely that Union Pacific viii receive
strong support in the market 1t is not
at all impossible that the open display
i OF significant buying yesterday was the
! first real evidence Of this. and that if
anything even more convincing Is needed
to make the bonds &c, 1t viii be forth
/ coming.
/ The weakness Of American Smelling and
] Refining stocks was not satisfactorily ex-
planned. and there was disposition to
attribute it to the decline in silver, which.
/ il was contended, had a fairly direct effect
on the prospects for the smelling husi-
! ness Another factor which perhaps
inquired more largely in the selling was
that the expectations of an increase to 10
per cent in the dividend rate at the time
/ OF the next declaration toward the end OF
the month are no longer entertained. The
best that is now looked for IS that the
rate may be made S per cent, and even on
/ this the promises are none too positive.
One of the most widely read of brokers'
/ weekly letters says in part:
THAT the world has been spending more
capital than it could conveniently afford
is true. That halt has been called also
seems true, and that the railroads found
it difficult to stop at once is plain. al
though the larger part of the issues Of
/ this year will be used for retiring tempo
/ rary obligations rather than to do new
work. and therefore Will not be to this
extent demand for new money from the
market. We ask ourselves what stock
exchange prices are likely to do here in
/ New York, and we find it hard to give
| an answer. That the general sentiment
/ is TOO bearish seems probable That an
unusually large proportion OF our stocks
are held by very rich men seems true. No
/ doubt such men make great mistakes,
/ though they have become rich because
! their mistakes were fewer than those of
less successful persons.
1T is easy to give reasons why invest
ments should not be made in the United
States. but it is easier to give a greater
number Of reasons why they should not
be made in almost any other great coun-
I try. To prove this. we have only to study
/ conditions abroad, and especially to read
the debates in the English Parliament, in
j the French Assembly. or in the German
! Reichstag. Proposals have been seriously
made there, and have been and are being