New-York tribune., 1907-01-14
THE WEEK IN WALL STREET.


Pennsylvania Railroad Company OF its intention
TO increase its authorized capitalization by
s200000OO0. II was not TO be expected that
stock market prices could in the week Just
passed make progress toward higher level and,
as matter Of fact. only active issue. St
Paul, stood on Saturday noon higher than at the
corresponding hour seven days previously. Dur
ing the first part OF the week furrles IN the call
money rate, which on Tuesday rose to Is per
cent gave indication that the banks We're
cerned over the shrinkage Of the surplus
serve to almost the vanishing point, and recOs-
nized the necessity OF taking measures for
strengthening their position. Time funds also
ruled frmer. and the dearness Of money. for
which additional explanation found in the
preparations for furnishing a large sum 70 the
American Telephone and Telegraph Company
on its notes and for repaying several millions
Of dollars Of government deposits. negatived any
prospect Of stock market advance at the mo-
ment.
AS the week wore on, however, money market
conditions improved. the call money rate easing
off on the announcement by the Secretary Of the
Treasury of a postponement for nearly two
weeks Of the call for the return Of $4,000 900 OF
public moneys one-half to be repaid Febru-
ary l, instead Of January 90 and the other half
on February Is, instead Of February !. as
originally ordered. and the steady gain Of
cash from the interior by the local banks and
the improved position Of the London and Paris
money markets. Then came the news on Fri
day morning OF the plan of the Pennsylvania
Railroad Company to make another great in
crease in its already vast capitalization.
nouncement which. following so closely the big
increases Of several other leading railway sys-
TENS caused a break in stocks even more Sc
we're in London than on the local market. The
decline was shortlived. however, for encourage.
ment was soon found in the clear indication that
the banks would on the next day be shown to
have strengthened decidedly their position the
known movements Of money during the week
making it probable that the gain IN cash would
amount to about s12.0Oo0O0. The statement on
Saturday closely coincided with the preliminary
estimate. the cash item showing an increase of
s10.57S.soo and the surplus reserve being swelled
from its nominal size Of the preceding Saturday
TO the comfortable figure of sS4s2.s75, which
compares with a surplus of s12, 7os $50 a year
ago and with s24.459.275 at the corresponding
date in 1905. Comfort was derived also from
the fact that the loan item showed a decrease
even though not more than ss5S,0O On this
showing and in the knowledge that the return
How Of money from the interior has begun, the
stock market rallied rather sharply in the late
trading on Saturday. movement which may
be carried little further this week
That the upward movement can be other than
temporary, though. no one but an absolute
enthusiast believe Business conditions
throughout the country are still excellent, the
latest railroad returns show almost without ex-
ception increases in gross earnings. the roads
are taxed beyond their capacity to handle the
traffic offered them, and in all directions are the
indications of ebounding and an abiding
n n hat itIy 10
the explanation OF the scarcity of money for use
in stock market operations. Money is returning
from the interior, as has been noted, but not In
anything like the volume in which 1t has flowed
back at this season In former years, and great
corporations are bidding eagerly for such funds
as can be made available here. the increase Of
their business, resulting from the national pros
perity, compelling them tc obtain at whatever
concession the money required for meeting the
cost OF enlarging their facilities An Indication
Of this. and Of the improbabillty of real ease In
the money market for months to come is seen
in the many note issues which they are putting
out. The New York, New Haven 6 Hartford
Railroad Company for example, has within the
last two months disposed of total of s2s, ,OOG,-
600 short term notes and the American Tele-
phone anu Telegraph Company last week placed
with syndicate s25 100000 of three-year per
cent notes. paying for the accommodation about
II per cent a year.
, The actual dismay with which the announce
ment OF the Pennsylvanias proposed new fnanc-
ing received. both here and abroad, is
already beginning to lessen, as IL is consid-
cred that the object Of the vast sum ultimately
to be raised on the issue Of the securities about
to be authorized Is the improvement and ex-
tension OF the facilities OF the greatest railway
system of the United States for moving a
traffic which has outrun already its enormous
capacity, and that il IS not the creation of a
war chest for employment in extending the
Pennsylvania's empire over other systems Fa-
vorable comment is made also on the policy OF
the Pennsylvania in announcing its plan full
two months in advance OF the stockholders
meeting, instead OF pursuing the course adopted
recently by another great road. which sus-
gested the episode OF the traction company's
meeting few years ago. when the chairman an
eminent fnancier replied to the request of a
stockholder for information on some point by
saying: Vote first and talk afterward!"
Less discouraging 10 stock market activity
than the recent succession OF vast railway sec11-
rites increases, effective and prospective but
nevertheless in some measure also a deterrent Is
the still uncompleted inquiry OF the Interstate
Commerce Commission into the financial meth
DDS by which the Union Pacific has established
its primacy over number of other roads. each
u 4o i'0a'A S'Ie attN Hhpoi'ahce Sut Whatever
may be the conclusions reached by the COM
mission and the recommendations based on those
conclusions. even though the Union Pacific may
be obliged TO divast itself OF its holdings of
Southern Pacific and Atchison stock It is hard
TO see how the railway situation will be weak
ened and improbable that the roads will in the
future war among themselves. In so FAR as the
investigation may disclose the commission OF
acts by the masters OF the Union Pacific not
strictly legal. although done perhaps In the spirit
of benevolent despctisln good Will -esul. %or ,ls