The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-01-17
STOCKS AGAIN
ON DOWN GRADE
Railroad List Weak OWING to
the Extraordinary Demand
for More Capital.
BREAK IN MORGAN GROUP
MONEY MARKET CONTINUES
EASY.
BREAK IN MORGAN GROUP
MONEY MARKET CONTINUES

new YORK, Jan. 16.-There was heavy
hquidation of securities upon the stock
market today. due to the constant extern
sion OF the demand for new capital bv the
railroad companies. The most consnicu-
Gus phase of the subject which was do
Veloped today was the seeming intimation
OF the need of the resources in hand fo,.
the work or the railroad companies might
Drlng about a check to the disbursement
Vi proIlts TO stockholders in the case of
some companies. This suggestion nroved
especially influential to speculative senti-
ment toward the low priced railroad
STOCKS Companies whose securities are
IN TINS class are at a natural disadvan-
tage IN raising new capital because Of
the heavy discount which must he al
lowed for the sale Of securities with a
margin of net earnings so narrow as to
reduce the security for the payment of
fixed charges.
The first effect Of this element in the
situation was most acute upon the Nor
gan group of stocks. The Southern Rail
way stocks broke violently and the pre-
ferred stock especially seemed 10 lacl,
any bids for offerings pressed to sale
The feeling was revived in full force
which pervaded the market when the
pennsylvania stock issue was first an
nounced, that estimates hitherto present
ed OF the capital needs of the railroad
corporations had been grossly miscalcu-
lated. Erie was the earlier stock to show
close sympathy with the slump i'm South
ern Railway, the rest of the market being
disposed for time to ignore the move
ment.
The first spread of the movement was
to other low priced stocks which might
be supposed to have similar difficulty in
raising capital. The growing weakness
of the market was due very generally TO
the consideration of the same topic from
different points of view. The strength
which has been shown recently in cop
per stocks upon the talk of a merger of
important Michigan properties gave way
to sudden weakness in Amalgamated
Copper. when the suggestion found ut
might be involved in the supposed mer-
ger. The vulnerable condition of the
market invited aggressive tactics by the
bears and they operated with great bold
Eess on a large scale. This was manifest
i'm the rumors which circulated and which
were denied. and also IN the extent of
the demand TO cover shorts at times when
the liquidation spent it's force.
The forces of replenishment Of money
supplies continued to operate and the
call money market showed positive ease
at per cent and below. Funds are re-
ported TO be flowing to New York from
the interior in large volume and sub
treasury operations have yielded to the
banks this week S7.1090 900. Discounts in
London yielded again and the impress
sion was strengthened that the Bank of
England discount rate will be lowered to-
morrow. The continuation of the liquida-
ton caused stocks to sell at the lowest of
the day in the final half hour but the
demand from uncovered shorts caused a
substantial rally which was held to the
closing.
Bonds were irregular. Total sales (par
United States bonds were unchanged
on call.