The Washington herald., 1907-01-12
Big SLUMP IN PENNOY
Huge Stock Issue Not Ac-
ceptable to Wall Street.
GENERAL WEAKNESS RESULT
Copper and st. Paul Common show
Strength, but other Securities Feel
tion-GOod Bank Statement Prom
ised-Can Money In Abundance.

tfon-GOOd Bank Statement Prom
ised-CaH Money In Abundance.
New York. Jan. 1.-THE news received
long after the close Of business hours
yesterday. and which did not become gen
orally known until the appearance of the
morning newspapers to-day. that direc-
tors of the Pennsylvania Railroad Com
pany proposed to ask authority from their
stockholders at the annual meeting of the
company on March l. next for an addi-
tional issue of S1O0000.0O0 stock and of
500, 1000 bonds came as an unpleasant
surprise to Wall street.
There have been times when an increase
of this character would not have caused
any perturbation in the financial district
If indeed, 1t would not have been regarded
as a favorable factor so far as the price
of stock is concerned. But in recent
weeks. for reasons that fl IS not necessary
10 emphasize, increases Of capitalization
by the great corporations OF the COun-
try have not been looked upon with any
thing which can be called delight by those
who regard such matters from the point
of view Of the immediate stock market.
The additions to capital account in the
case of Pennsylvania in the last five
months have already surpassed all pre-
vious records of the kind in the railway
history of the land, and the bare and un-
qualified PRONUNCIATION of the fact that
the company proposes to create 500, ,090,-
900 worth of new secSc1ties was certainly
dismaying at least 10 spectators for the
rise.
Drop of Four Points.
1t caused general weakness in the
American stocks IN the London market
before the opening business here. and re-
suited in our own market a few minutes
after dealings began in a drop Of points
in the price Of Pennsylvania stock, and
in recessions Of from TO points in quo
tations for other prominent shares. These
prices. however, were for the most part
the lowest of the day. and although the
market was Of uncertain tone in the fore
noon. and was again under pressure after
midday it yet rallied vigorously in the
late trading. so that the greater portion
or the losses previously recorded were
made good.
on more prolonged observation. senti-
ing grew more optimistic than it was
originally. 1t was pointed out that it
had been known ever since last June that
the Pennsylvania would have 70 raise
some time during the present year $5o,
000000 with which to pay off its short
time notes maturing on November J. and
would also require in the same period
100000 for the purpose of completing
its tunnel construction in this city.
17rra1 HssH I-... 4 Ia.
cent sale by the Pennsylvania of It's Bal
timore and Ohio. Chesapeake and Ohio,
and Norfolk and Western holdings had
placed the company in possession Of sucn
a quantity of funds that its demands for
new money during the present year would
be mitigated. But, on the other hand. II
was admitted that the development of
new business along the lines of the sys-
TEN had been such as TO necessitate an
enlargement Of estimates of the amount
OF ears. engines. and general equipment
that have been provided during the
tWelvemOnth.
The belief was entertained in good
quarters that The new bonds to be issued
by the Pennsylvania would be convertible
bonds thus largely reducing the actual
amount Of new capitalization. osteusibly
TO he created under the wording of to-
days announcement, while there was q
proposed 20 use the proceeds Of the sale
of 4 large portion 'of its new securities
in making for itself a tTansc0uunental
connection and in taking over the stocks
of many Of the subordinate lines in its
system
Receivers Part Of Loss,
Attention rested upon the great increase
during the year in the Pennsylvania gross
earnings and its low price as per
cent dividend-paying stock 1t was also
borne in mind, finally, that there was
absolutely no certainty that all of the
new securities We're to be issued in the
present year, and it would probably be
a long period al best before any OF them
were placed upon the market.
BE this as it may, it was a matter Of
common observation that the stock mar
ket behaved to-day under the shock to
which it was subjected in such a manner
as to justify strongly optimistic senti-
ment regarding the future Of the market
as a whole. Save in the case of the
Pennsylvania shares no large blocks of
stock were thrown upon the market. and
such liquidation as occurred seemed to be
only from small holders Of stocks and OF
d generally dribbling character.
one or two stocks displayed great firm
ness. Support Of the strongest kind was
extended TO AmaIgamated Copper, and
this stock closed for the day at a net ad-
vance There was too, from the begin
ming Of the stock exchange session to the
end vigorous buying of ST. Paul common
stock which served 10 advance its price
rs points for the day
one other stock besides Pennsylvania
that was notably weak was Canadian Pa
NH DF
decline of IA points from its yesterdays
closing quotation. Rumors circulated
that a new issue of S50000000 of the stock
was impending, but they received what
was apparently an authoritative denial.
Every development to-day. aside from
the news pertaining To the Pennsylvania
was helpful in a market sense. There
was further material evidence Of the
prosperity of the copper producing and
iron and steel manufacturing business
Call money was offered in abundance at
BIZ per cent-bank renewals being gener-
ally made at this figure-While in the
afternoon funds for one days use could
be obtained practically at any figure
Moreover. the forecasts of to-morrow's
bank statement were extremely favorable
The gain in cash by the banks during
the week was estimated at from S1I 0Oo.-
600 20 Sl1 SOC, 600, and inasmuch as the bank
returns Of a week ago erred in reporting
a cash gain of 100000 less than uD-
dOubtedly occurred. the presumption WAS
that the increase of cash holdings shown
by the clearing house institutions to-mor-
row would be very considerable. Bank
loans, too, should have been decreased as
a result of the weeks operations.
NEW YORK MONEY.