The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-01-22
WALL STREET NOTES
Reading Pool Starts Rally
When Stock Drops to 125.
PUBLIC SOMEWHAT CAUTIOUS
Average Trader Not Satisfied by
Speculative Operations Such as
That of Yesterday-LawsOn Urges
Buying OF AmaIgamated - Rock
Island Is ia Strong Position.

Reading will be at 125. This was the tip
that was passed around In the inner
circle OF the Reading crowd. even when
the stock was selling above I29 soon after
the opening. The intimation that went
with the tip was that the original pool
would resume operations when the stock
| touched the price named, and those who
received the Information wondered how
/ long they would have TO wait for an
! opportunity to buy at this figure. They
were not kept in suspense very long. for
around noon the selling began that was
to do the trick. and soon after o'clock
the stock dropped a point below the nee
! essary level. when aggressive buying
| started a rally that for fifteen minutes
or so was little less than violent Maybe
/ II satisfied those who had predicted the
/ resumption of operations. but 10 the aver
age trader it was not entirely convinc-
/ ing.
One thing that the bull crowd in Read
ing-and the bull crowd in other stocks
/ for that matter-is likely 10 find out is
| that the public viii not hereafter Join IL
/ speculative operations without having
/ good reason TO believe that there is a
substantial basis for a movement IN the
stock that is made the subject of manipu-
/ lation.
/ Stocks cannot now be put up," said
a broker to-day nor can Chey be worked
/ up unless there is value to justify higher
prices. Hereafter, when we are told that
a stock is 10 be advanced we will look
( into its value first, then scrutinize the
/ buying carefully TO make sure II is as
good as the talk. II satisfied on these
points, We may buy. but not otherwise"
/ Apparently the bearlsh talk heard
about Pennsylvania in the past few days
/ has been intended 10 facilitate the cover
/ Ing of shorts put out at about the time
announcement was made OF the proposed
/ financial plan. 1t will be remembered al
/ the time the plan 10 ask the approval OF
stockholders TO an issue OF 100000 0uJ
stock and 100000 600 bonds was announced
/ there was criticism Of the manner Of
making the announcement on the ground
/ that as the matter could not be taken up
before the stockholders meeting 10
March. there was an object IN publishing
the facts at such an early date, and that
whatever the object was il did not augur
well for the stock market As a matter
Of fact there was a reason for making
the announcement at that time, and IL
had nothing whatever 10 do with any
movement in the stocks
/ Proxies for the annual meeting OF the
/ Pennsylvania Railroad are sent out 70
/ holders Of the stock sixty days before
the date Of the meeting The road has
+ upward Of 10000 stockholders, and long
/ period IS necessary for the getting In Of
/ the proxies and their tabulation, and In
order that it may not be claimed that
proxies are obtained without information
as TO the purpose for which they are 70
be voted the management makes known
its intentions as fully as It can so far in
advance OF the actual date Of the meet
ing. Those who thought that there was
an Interior purpose IN making the an
nOuncement nearly two months ahead.
and who reasoned that 1t meant a bear
campaign In the stock, were not only un-
just in their criticism. but they showed a
lack Of acquaintance with the regular
routine Of Pennsylvania affairs that de-
prived their opinion regarding the stock
Of all right to serious consideration.
No one can say just now what shape
Pennsylvania new financing Will take.
The road will have the option Of issuing
stock, bonds, or car-trust certificates. or
sozOe Of each, according TO the conditions
in the money market and other circum-
stances. Not all the new securities will
be issued, however, and if car trusts are
created the amount Of stock and bonds
to be sold viii be proportiOnately les
sened. Car-trUst obligations are very pop
ular form of investment. and If a bet
ter market can be found for them than
for stock OF bonds they viii probably be
used within the limits TO which they can
be applied There is. Of course, no reason
why they should not be issued 70 per
manenty finance the purchase Of the
equipment temporarily provided for in the
S50000,O0O notes which mature next fall
Thomas ". Lawson, who couple of
years ago advised the sale of Amalga-
mated when the price was 40 points lower
than it is to-day. flooded the street with
the following advice on the stock: II
unqualifedly ADVISE Amalgamated as
best purchase on list-next to Trinity.
Buy II now. Don't take less than %
points profit. You will get them quick.
and barring accidents, 80 more" II Mr.
Lawson had only made his prophecy in
December 1901 when he predicted
break, his tips on Amalgamated might be
entitled to some consideration now
Wall street at the moment is as favor
ably inclined to Amalgamated Copper as
any stock on the list This is the result
of
it is believed. not only assure the con
tinuance OF the present rate of dividend, /
but make IL reasonably certain that an /
enlarged distribution will be made at the I
next quarterly period when the company
has derived benefits from the high prices /
for copper in effect this quarter The /
quarter in which the last dividend decla- I
ration was based did not share to any /
thing like the full extent in the prosperity /
which the advance In prices has brought /
into the trade, for the greater part of the |
copper sold was in fulfliment of old con- /
tracts Now, however, new contracts If /
higher price basis are in effect. and /
many Of them are for such long period 4
that the company is assured of COOL /
prices for many months to come The /
very satisfactory trade conditions have /
brought Amalgamated into more consider /
alton from the investment standpoint 4
than at any previous time in its history.
a prominent stock exchange house /
concludes an elaborate story of the posi- /
ton of Rock Island in the following
terms:
The section of country traversed by /
the lines Of this system is showing a
wonderful rate OF growth, and is capable
Of sustaining many times its present pop