The Washington herald., 1907-01-10
WALL STREET NOTES
FinancierS Not Surprised by
Hartman Disclosures.
TAX CASE AFFECTS READING

Decrease ON stock Transfers PIeases
Traders-Net Earnings show De-
crease over Last Year-Liquidntion
of Loans Responsible for the In
crease in Call Loan Interest.
New York. Jan. 9.-Mr. Ripley's admls-
sion at the Interstate Commerce Commits
sion investigation that the Union Pacific
interests bought in all Sf0.OO0.0C0 par value
of the AtchisOn stocks did not come as a
surprise to well-informed people I'm Wall
street As was pointed out on Saturday
one Of the surprises Of Comptroller Mahls'
testimony was that when Union Pacific
and Oregon Short Line took over. since
june l. 1906 the large holdings of stocks
previously acquired in their interest these
included only 100000 shares Of Atchison
preferred instead of four times that
amount Of the preferred and common com
bined The supposition based on that tes-
timOny was that the 100000 shares of the
common had been sold at the time of the
last big movement in the stock just prior
10 the declaration Of the fall dividend. al
though there was not and is not any real
proof tlat this is so
1t is not strange that MT Ripley was not
made acquainted with the fact that the
Sloo,0o0o0 Atchison preferred was taken
over by Oregon Short Line. for Mr. Ripley
is an officer Of Atchison only. while the
taking over Of the stock was a Union Pa
cific matter. Neither would Mr. Ripley be
competent 10 talk on the question Of
whether the common stock OF his road
originally purchased by the Union Pacific
interests has since been sold. except so far
as the transfer books might have afforded
clew at the time Of closing for the pay
ment Of the last dividend
Specific evidence on this point by some
Union Pacific officer viii be awaited with
"a good deal of interest. as the common
is the only stock known to have been ac-
cumulated which has not now been ac-
counted for.
II is. of course. possible that the Atchi-
son common bought by capitalists inter
csted in Union Pacific has been sold with
out being actually distributed in the open
market All Of il might have been dis
posed Of in "a block, and there are quite
few brokers who think that il may have
been sold In that way 10 Pennsylvania
When the latter read sold 10000 shares
OF Baltimore and Ohio TO Hartman inter
ests. it received more than enough 10 buy
an equal number Of shares OF Atchison
ON several million dollars over and above
what the 100000 shares OF this stock. now
unaccoUnted for. would have cost. A cir
eHmstance which makes it highly proba-
bic that if the AtchisOu common had been
sold at all. the transaction has been Of
this kind rather than distribution in the
open market is that the floating supply
instead of being larger than usual. ap-
pears at present 10 be of unusually small
proportions. So far as appearances go. il
looks as II there IS continued accumula-
ton Of Atchison by the s0-called Union
Pacific interests, and the object Of this
may appear later.
At the opening Of the market. there
was bear tip on Northern Pacific which
made good TO a greater extent than
might have been expected in view q its
fiimsy character. The argument which
backed up the tip was that as there had
been an obstacle in the way Of short sell
ing while the stock sold with the rights
on the removal of this Obstacle-the stock
being quoted eN-rights to-day FOR the first
time-lefJ the way open for tie beIated
decline. II did not appear. however. as if
the selling precipitated any real Hquda-
ti0n. and about the only effect OF the
peculiar campaign was 60 increase the
size of the short interest that for the
reason mentioned probably had been
rather small before.
Business in Reading was stimulated by
the decision In the transfer tax suit.
which declared the amendment 10 the
original laws unconstitutional. the effect
being that hereafter the tax would be .
cents on 800 par value. instead Of cents
on each share regardless Of its par value.
Reading being half stock. or g par value
Of $50 n share, Will hereafter be taxed
only at half the rate it has been obliged
to bear. and this is expected 70 add 70
the popularity Of the stock for sale on the
advance.
While technical conditions may be en-
tirely favorable to bullish operations in
Reading, the earnings can hardly be such
as TO arouse enthusiasm regarding the
stocks prospects. For the five months
ended November 80 the net earnings Of all
the Reading companies showed a decline
Of SS6S COO or the equivalent Of Ia per
cent on the common stock, as compared
with the corresponding period last year
while the mild weather that has prevailed
since has not tended TO increase the de
mlnd for anthracite coal, however help
ful it may have been in facilitating ordi-
nary railroad operations.
According to some banking interests.
in call money in the past few
days has resulted from the maturity Of
large time loans. which were made to
carry over the turn of the year so that
borrowers have been obliged 10 make new
arrangements before the market had re-
turned 10 a condition Of permanent ease.
In order 70 make time loans some banks
have been forced TO withdraw from The
market as lenders Of call funds. and as
others withdrew for different reasons.
there was for the time being consider
able curtailment Of the amount Of funds
10 be loaned on call and hence the ad-
vance in the rate 1t is believed that as
soon as the time loans have been made
on what the banks woJld call a fair
basis the rates on cali viii drop down
20 something ike normal level
The apparent liquidation in the South
ern Railway issues brought rumoT that
the dividend on the preferred stock would
be reduced temporarily. so that the com
pany might devote larger portion of its
net earnings to Improvement in order &C.
more adequately take care of it's rapidly
growing business just as Rock Island
discontinued dividends on its preferred
stock a year ago. But although such ru-
mOrs We're circulated widely, they were
denied on good authority. and. indeed. de-
NAL was hardly necessary at this time. in
view of the fact that the next dividend
period is still three months off. Southern
T29f1u-a7- laey ,rrd,-