The Washington herald., 1907-01-14
Prices of Shares Declined on
Every Day but One.
RAILROAD INQUIRY EFFECTIVE
IndustriaIS Made Stronger Showing
Than Railway StOcl<s-Pennsyi-
vania's Projected Bond Issae
Shocked Wall Street Temporarily.
Government TO Refund Bonds.


irregular and, taking the market through
and through. reactionary. Indeed, prices
declined every day in the week except or
Saturday, although the fail on several
lays was slight and the market on these
occasions was dull and stagnant rather
than depressed. On Friday it had to bean
up under the manifest blow delivered by
the entirely unexpected announcement OF
a further proposed increase OF s200.00 ,e0(
in the capitalization of the Pennsylvania
Railroad Company; but after the decline
that attended this news a sharp recovery
followed, and it appeared TO be the case
that the technical position Of the market
was pretty sound
The influences mostly contributing 10
the weakness in theearly part of the week
We're first, the rather more sober general
consideration of the character of the hank
statement at the end of the preceding
week and the substitution of an unpleas-
ant impression rather than favorable
one regarding the results Of the Interstate
Commerce Commissions investigation Of
the Hartman railroads. While there was
every indication that bank reserves were
was confirmed by the succeeding bank
.statement-and signs also of an improve
ment in the money situation in all the
worlds financial capitals. the fact. never
theless, that the bank surplus here was
down to the legal minimum made #
clear that no headsTOng speculative cam
paign for the rise IN stocks should be
Immediately undertaken
Government Must Pay sII6,OOG.OO
Call money rates We're stin during the
first three days of the week. falling. how
ever, on Thursday to a comparatively low
range by reason, apparently. of the an
nOuncement that the Secretary of the
Treasury had postponed until next month
the time of the repayment of the Sl2, 2,C00, %
600 special deposits of public money with
the national banks which were 10 have
been turned over TO the government on
January 20 and February 1. As the Treas
ury's balance is now large. 1t is wholly
probable that if the withdrawal of this
money by the government even during
the coming month viii be found to cause
inconvenience 20 the money market It will
not be enforced: so that so far as any
financial complications caused by Treas
ury action are concerned cause for anx-
iety is lacking.
Some time before July /, Of course. the
government must make preparations for
the repayment or refunding of the S116.-
0o,oo0 Of the per cent bonds which
mature on that date 1t is unsettled
whether the bonds will be paid off in full
from the Treasury's balance or in part
paid off and in part refunded, and Il is
an open question how these contingencies
will affect the deposits of public money
now resting in the national banks. On the
other hand IL is certain that a very con
siderable portion of the bonds due in
July viii be exchanged for . per cent
bonds and viii pass into the hands of the
national banks, where they viii be used
as q basis for new bank note circulation;
while a further increase in bank note
circulation will unquestionably be af-
forded by additional issues Of Panama
Canal bonds.
IndustriaIs Stronger Than Railway.
Time money during the week did not
get above a 6 per cent level for all
periods. Sentiment regarding the money
situation, present and future, was affected
10 a greater or less extent by the large
borrowing Of various corporations in the
shape of an issue of short-term notes on
a basis Of interest payment that afforded
a return of not far from g per cent. It
was admitted that the logical inference
from these transactions was that the
price for time money for a considerable
period to come would not fall materially
below the present prevailing quotation
for H. II may very much be doubted,
however, whether any forecasts Of the
probable course of money rates during
the remainder of the year are extremely
valuable at this time.
Taken all in all, it must be said that
the news OF the week went to emphasize
the suggestion made in this column a week
ago, that as a matter Of theory the great
industrial stocks occupy a stronger posi-
tion in the market at present, at least In
a speculative sense, than do those, Is =
rule. of the railway corporations
Moreover. everybody recognizes that
the prices obtained for the products Of
these companies are now such as 10 make
very large the profits of the enterprises
concerned. especially in those instances
where the Industrial companies are pro-
ducers of raw material as distinguished
from manufactures It is the Industrial
companies that are now directly and i'm
mediately profiting by the increases in
railway capitalization. The issues of rail-
way stocks and bonds and short time
notes mean that the railways are forced
10 make provision in a gigantic way for
the enlargement of their facilities in
every direction, the work requiring an inn
and OF the varied articles turned out by
Industrial establishments.
Pennsylvania Issue Jars wall Street.
All that Wall street talked about at the
end of the week was the PENNSYLVANIA
new issue of sos, 900 in stocks and
bonds. and discOncertment over this an
n0uncement did not seem 30 result 50
much from the circumstance that the
Pennsylvania has so greatly increased its
capitalization in recent years as from the
fact that the Pennsylvania managers con
fessed that the necessities of the road for
money were outTunning estimates thereof.
Perhaps if the Pennsylvania directors had
published a full and clear statement of
the uses 10 which they proposed to put
the new money asked for, a matter that
was afterward more or less elucidated by
the work of private analysts. their an
nouncement of the plan would not have
given Wall street the shock il did.
In the failure, however, to adequately
gauge the exigencies Of the future SIR.
Cassatt and the directors of his company
were not alone in railway management.
There is not a president Of railway or
ganization in this country who dreamed
year or eighteen months ago that he
would have to deal with any such amount
of new business as ne has to-day and is
likely to have for a long time TO come.