The Washington herald., 1907-02-03
WALL STREET NOTES
Bank Statement HaS No Eff
feet on Traders Actions.
MARKET ABsORBS ALL STOCKS
Brokers Have No Trouble I'm Selling
During Last Half HOur-NO Credence
Placed In story OF Friction Be
tween America and JaPan-U. +. to
Sell ex-Dividend During March.

New York. Feb 2-The traders who ex-
pected to sell on a good bank statement
did not get the good bank statement but
they nevertheless found very fair mar
ket for any stock they had to sell in the
last half hour OF business. The reason
why the market practically ignored the
statement was that the increase in the
items Of loans was generally regarded as
meaning nothing more than that the trust
companies and the out-of-town banks had
temporarily withdrawn their funds-the
former because they wanted to keep up
rates and the latter because they could
find more profitable use for their money
in their own localities than lending Il In
( Wall street on call at about per cent.
The general feeling among the brokers
was that for the time being the money
Question had ceased to be matter OF
concern, and that in the course of events
if rates advanced TO point where the
out-of-town banks and the trust COM
|panies could find it profitable TO come
forward as lenders. there would soon b.
a supply OF funds sufficient to relieve the
situation once more.
An effort was made soon after the open
ing of the market to make bear capital
out Of the alleged hitch in the negotia-
tions for the arrangement for a treaty
with Japan. but the story received little
Icredence, especially as it was observed
that those who were busiest in disserni-
mating it We're buying stocks at the same
time.
Union Pacific will sell ex-dividend about
the middle Of March Taking account Of
this dividend. the stock is still selling on
about a per cent basis. This large yield
has induced a good investment dena nd
for the stock, and some very shrewd op-
orators say the selling that was most in
. fiueHtial IN depressing the price In the
past couple Of weeks has ceased. and that
there is now an appearance Of very good
buying. These observers say they attach
more Importance 10 the buying they see
IN the stock than TO all the professions OF
indifference TO the Interstate commerce
Investigation that has been heard in high
circles since the beginning of the year.
"The insider told us the investigation
4 could not hurt the company" said one
trader but We had our doubts Now.
however. the price has gone down until
any possible effect is discounted. and the
insiders not only continue to express con-
hdence. but they have begun 70 bet on
the outcome 10y buying the stock In this
case money talks, and l believe what IL
says
Some brokers who can see nothing in
the market but what is bearish contend
that the reason why Union Pacific has
dropped TO an extent relatively much
/ greater than the decline in Southern Pa
citic is not to be found in the probability
Of an increase in the dividend rate on the
latter next summer. but in the possibility
that the former is not permanently on a
10 per cent basis. The contention Of these
bears is that Union Pacific, when it de
cided 20 pay at the rate Of { per cent a
year from its investments TO supplement
the s per cent rate from operations. had
received n large return from sale Of
rights on Great Northern in connection
with the allotment made in December.
1893, and that as the subsequent sale of
the Hin stocks deprived the company Of
any benefit from the melons recently cut.
il is not certain that the present yield on
investment IS large enough 10 maintain
the per cent rate.
This argument IS not seriously enter
tanned outside Of the circle IN which only
ultra-bearish opinions prevail. but that
they are entertained ut all throws some
light on the character Of a part at least
OF the recent selling Of the market.
Amalgamated Copper sold down to
10 Is and closed a point above its low
level 1t is said that at 10 there were
large buying orders for the account OF
some of the largest interests in the prop
erty, but it did not seem as II those who
were willing 10 lend support in case the
price dropped somewhat further than IL
did were particularly anxious to follow
the advance. The fact that the insiders
were more inclined 10 help the stock by
letting it become known what they would
do In the event OF a further decline than
by actually buying NJ the market price
was not exactly the kind Of encourage
ment the street wanted.
There was talk Of a large short inter
est, but it was recalled there had been
the same kind of talk when the price
rose 70 above 10 a few weeks ago. and
many conservative brokers' have begun
TO wonder If the excellent condition OF
the trade was not being awaited of to
stimulate the market for sale Of a good
part Of the insiders stock
The street professed disappointment
over the Pennsylvania statement for De
Cember on the ground that while the
gross earnings were magnificent. the
far greater part Of the increase in this
item was consumed in operating ex-
penscs instead of going TO swell the sur
plus available for distribution to stock
holders. 1t is to be remembered. how
ever, that December is the last month
in the Pennsylvania year. and as all
railroads include in the last month of
their fiscal year a number Of odds and
/ ends that they could not put In earlier
4 II IS never safe to base absolute con
illusions on the statement that is made
the medium for this adjustment The
stock was raided IN the first hour, but
this was probably due rs much to the
reports Of the possibility OF labor trou-
bic as to disappointment over the months
results.
Referring to political hostility to the
railroad corporations. one of the largest
commission houses in the street says in
J, It's weekly market letter:
"A china shop is no place for strenuous
bovine onsets. There is no more complex
and sensitive fabric than that of credit
Upbuilt slowly and with the greatest
care, 1t magnifes the power OF capital
many fold, and in the last analysis is the
skeleton frame upon which prosperity
rests. To attack it ruthiessly is no right
even of kings. Years ago, far away
towns were bonding themselves and the
States were giving millions of acres of