The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-05-13
THs FINANc1AL SITUATION.

NtNSNy
no time recently been any great enthusiasm
in speculation for the rise in the price of
securities, but what there was was chilled
somewhat less than a fortnight ago by the
extremely ~unfavorable batch OF railway
earnings. mostly covering the month OF
March. that were then reported. Also the
particular heaviness Of certain stocks. such
as the Delaware and Hudson and New
York Central shares. helped to restrain trad
ing and TO a more or less extent TO depress
prices. There were strong indications after
Union Pacific common stock had touched a
price OF $50 as a result OF thinly disguised
mauipulative efforts that announcements OF
interest concerning the affairs of the COM
pany were impending, and, made wise by
recent experience. people in the financial
district were generally anxious to know just
what these announcements we're before fur
ther extending their market commitments
Finally there was no letup, or none 10 speak
of, in the substantially verified stories OF
damage TO the crops over the entire west
ern and southern parts Of the country
by the prevailing unreasonable weather
conditions. and it was admitted that the
Government crop report to be published
on May 10, compiled from observations
taken at the first OF the month. would make
a poor showing as compared with that OF
the month preceding. The report when 1t
appeared put the statistical condition OF
the winter wheat at 80. o per cent. as against
see per cent. on April 1 and Of per cent. on
May /. 1905, and these figures indicated.
IN oonnection with q reduction In the area
planted to the crop Of $500 900 acres since
the beginning Of the season, q total yield
of but 405. 900, 900 bushels, as compared with
an actual harvest last year Of 49S, 0oo, 900
bushels. II Is estimated. In other words,
hat a decline of about lS por cent. Is likely
In this years winter wheat yield, which is,
it Is needless 70 say, a largo falling OF. These
figures must also he read in the light Of
the knowledge that since the first Of the
month the condition Of the crop has not
improved. As a general rule it is entirely
unsafe to make predictions concerning the
years harvest based OF the state OF the
weather during the year up to the first OF
May, and yet it seems fair to say that con-
sidering all developments to date only ex-
o~eptionally favorable weather from now
on until harvest season can produce a full
crop Of either spring or winter wheat n
that the years harvests are bound at best
to be unwontedly late, making possibilities
Of danger from frost a more potent factor
than 1t has been at any time during recent
years. It is to be remembered. OF course,
that much Of the winter wheat that has
been ruined can be replaced by corn and
other grain, but this again makes for a late
crop. 1t is obvious from all this that the
Manitoba wheat growing section is this
year to undergo q pretty severe test Of its
capabilities. Only within a comparatively
recent period has II been considered safe
in the grain trade TO attempt TO raise wheat
in this section On account OF the necessary
shortness Of the summer season in such
high ATTITUDES. Prospects for the years
cotton crop, I 90, have become impaired.
The Union Pacific Southern Pacific fnan-
oIal ARRANGEMENTS when they were finally
announced we're not at all well received in
the financial district, partly because specu-
lative hopes Of valuable rights accruing
from the formation Of holding companies
and the like were dispelled, but chiefly be-
cause popular condemnation is justly
strong Of the Hartman policy OF turning
railroad companies into banking and specu-
latiye ORGANIZATIONS. 1t Is argued in the
case OF Union Pacific that its new convert
ibIe bonds at their issue price Of 90 yield
about $50 per cent. to maturity and hat as
they are issued below par they are con-
vertible into the 10 per cent. dividend paying
Union Pacific common stock at a price OF
about 1871, or not such a very great way
above the present price level OF the stock.
It seemed, however, at the close OF the
week a matter OF very great doubt II the
Union Pacific would get its money from its
stockholders on this basis and that the great
majority OF the new bonds would have
TO be taken by an underwriting syndicate;
and this raises the very pertinent question
whether, IL an underwriting syndicate is to
take the bonds at ss. as is rumored, or at a
price which will allow them to be converted
into Union Pacific common stock at 1854
or thereabouts, such favorable terms were
not offered to stockholders in the first
instance. The bonds are. OF course, good
in an investment sense. IL people could be
assured that there was u be an end some time
to issues OF new Union Pacific and Southern
Pacific securities they would perhaps feel
differently about the matter than they
now do; but it ia now stated that not only
will they be asked to Immediately sub
scribe TO the new bonds and stock about
TO be brought out but that at the meet
ing OF stockholders OF the company at
which these plans will be ratified a further
issue Of $eO, 900, 900 Union Pacific common
stock Is to be authorized as we'll as a first
mortgage Union Pacific Railroad bond issue
for $40, 900. 900 OF so, covering the mileage
of the road upon which no obligation OF
this character now rests. Something like
5000. 600, 600 Of new Union Pacifc-Southern
Pacific borrowing thus looms up, most Of
IL arranged on a most expensive basis.
And what is It all for? A good part Of IL,
as is known, IL to provide money for the
enormous purchases Of stock in the New
York Central, Baltimore and Ohio and other
companies made by Mr.. Hartman last
wear at prices that now show a loss Of over
SIS, oOO, 900 on the investment. Are the
s~tockholders Of the Union Pacific to be
endlessly asked TO give Mr.. Harrim an
money 10 buy stocks Of railway corpora
lions, oil companies, water companies and
those Of a great variety Of enterprises,
sometimes at a profit II may be and some
times, az the event has shown. at a loss,
while his road stands in need OF double
tracking and q great variety Of other i'm
proyements and the worlds financial mar
kets are suffering from monetary strin-
eeucy? Ii there 20 be any limit TO the
achenne OF ACKNOWLEDGMENT and speculation
upon which the Union Pacific Railroad Com
- ka. ernharked9 And finally the in