The Washington herald., 1907-11-09
WALL STREET NOTES
Commission Houses Urge the
Buying of Stocks,
UNION PACIFIC THE LEADER
Active Trading with Plenty of Re-
serve Force Begins az Soon as
Traders Realize that Europe Is
Buying Bonds-ReadinE's Strength
Encouraging Despite Reaction.

New York, Nov. S-Only the expected
happened when the Imperial Bank of
Germany advanced it's rate OF discount
TO ~ per cent to-day. This action had
already been discounted and, with the
definite announcement OF the increase
the chapter of unfavorable news. which
had kept our market depressed, was
closed and a rally was in order
/ Quite few commission houses advised
their customers 70 buy stocks, expressing
their willingness TO carry these on g.
margin of about 30 per cent, with the re-
suit that there was far larger partici-
patton of the semiprofessionaI element
in the market than on any other day
for a couple of weeks past.
At the opening of the market atten-
ton was divided between the weakness
in United States Steel sinking fund
bonds and the strength in Union Pacific.
Soon. however. the traders learned to
disregard the former and pin their faith
TO the latter as one OF the most encour-
aging symptoms which the market had
shown in many d day.
! They were justified in disregarding the
weakness in the steel bonds. for which
| there was a special reason In Hquida-
ton by former holders OF Tennessee Coal
stock, and as for the movement in Union
Pacific, it was so evidently genuine that
any one at all acquainted with Wall
street affairs must have been wilfully
blind TO recognize its Importance.
The heaviest buying OF Union Pacific
IN the early part OF the session was
done by one OF the floor traders. who
took as much as 2OO0O shares in the mrs,
/ hour; but there were few people fool-
ish enough 10 suppose that this operator
was acting on his own account Under
existing conditions. such volume OF
buying by any trader would have been
out of the question.
The North American Companv ike the
American Cotton OIL Company. has de-
ferred action on its dividend on account
OF the money stringency. In both cases
the dividends may be declared later #
money becomes easy and business keeps
up. The statement is made by a director
OF American Cotton oil. who strongly ad-
vocated the course taken by that concern
that the company had at the end Of The
nscal year In actual cash in bank s.. 80. 900
and did not owe Il single dollar on any
account whatever.
North American, which sold as high as
1874 in 1902, and never sold below Is until
the present year, dropped to 81, making
new low record.
Signs OF animation are found in the
bond market. This Is a very welcome
change. and the more so because quite
little OF the buying comes from abroad.
The selling OF stocks for foreign account
on Thursday was widely commented
upon, but the cross movement in bonds
passed unnoticed, That the latter was
the more significant was shown when the
foreigners turned buyers of stocks to-day.
taking back at a higher level some OF
what they had sold on the day before.
Some OF the traders thought the explain
alton Of the strength Of the market was
found in the fact that an operator who
had sold his Tennessee Coal stock was. 10
use favorite expression OF his own.
"butting in" on the bull side, but evil
IDENTIFY a much more powerful force was
AT work than the united efforts OF all the
members of the late pool. which has lust
sold out TO the Steel Corporation.
The advocates Of the theory that the
rise in Reading was due 70 operations by
a former member Of the Tennessee Coal
pool who had on one occasion engineered
d notable movement in the stock OF the
leading anthracite company. seemed %
forget that the individual 20 whom they
referred had sold out his interest in the
iron company many months ago and did
not, therefore. participate in the deal Just
closed. The real explanation OF Readings
strength was IN the technical position
created by the short selling OF specu-
lators who had underestimate the stocks
true value.
II the close was under the best prices
OF the day this did not necessarily mean
that the rise had eliminated. There was
a good reason why the market should
have reacted in the last hour This was
found IN the need on the part Of the
traders to close out their trades before
the close Of the session. on account OF
the difficulty Of obtaining money for
speculative operations.
Nomiaally the money market was easy.
but had the traders attempted 70 borrow
for the purpose OF maintaining a specu-
lative position they would have been
brought up with sharp turn. They
were All huiIS hut recognized The npnee-