The Washington herald., 1907-04-02
WALL STREET NOTES
Canadian Pacific Again
Scores a Sharp Advance.
REACTION COMES ABOUT NOON
Bears Circulate Report that House
Is Forced 10 Cover 100000 shares,
but Rumer Is Given No Credence.
Smelling Scores an Advanee-At-
Gibson Rise and Dividend Question.

Smelling Scores an Advance-At-
Gibson Rise and Dividend Question.
New York, April 1.-Cansdian Pacific,
which had on Friday scored the sensa-
tional advance of fifteen points, was
again the star performer in the first hour
of business to-day, rising more than
seven points above the high mark at the
end OF last week The fact that the Lon
don market was closed increased the
facility with which the stock was ad-
vanced on the short interest. for as this
security is held largely abroad. the OBJ
servance OF the Easter Monday holiday
cut eff an important source Of supply
J that might otherwise have been drawn
upon too relieve the scarcity
The stock loaned at small premium
and the shorts were forced into a lively
Towering movement, until their position
was eased somewhat BY the selling OF
5000 shares by one OF the arbltrage houses.
The effect Of this selling was to cause a
reaction amounting to about half of the
earlier gain. but by noon the upward
movement was resumed as vigorously as
ever, showing that the short interest was
Of such proportions that the dumping Of
a few thousand shares could not relieve
its position permanently.
Another reaction occurred "a the last
hour in anticipation Of a supply OF stock
from London tomorrow, but on the
whole this issue behaved in way 70 fur
nish a wholesome object lesson TO opera
tors who. neglecting all considerations Of
value had in the past week sold sto k
heavily without regard to intrinsic value
or the means by which covering could be
accomplished
BY brute force of selling-selllng what
they did not own-the bears last week
succeeded in driving prices away down.
but brute force avails nothing when it
comes to buying back what they need 10
cover contracts. By the time they have
served their requirements in this respect
/ they viii realize that fnesse is one of the
/ first requisites In a successful market op-
orator.
vt the very tine when they felt eiated
/ over their apparent success and. in their
] ignorance Of Wall street and its ways.
/ fancied themselves the new powers I'm the
world OF finance others compared with
whom they were bat the nerest tyr0s,
were planning to take from them q part Of
their new gotten wealth. If they were al
lowed to 60 as far as they did. fl was
/ that they might take rope enough 10
/ hang themselves They took the rope, too.
and Judging from what has happened in
I Canadian Pacific, IL looks as il the hang
! ing viii pass of nicely
/ 1t is unfortunate that in comprising the
downfall of the plungers. innocent traders
should be made to suffer, for there is little
doubt that the market could have been
/ supported last week al a point to save the
holdings Of many who were carrying
stocks on margin. but the sentiment that
+ large interests might entertain in this
matter had TO give way to other consid-
erati0ns. After all everything went in ac-
IcOrdance with the rules Of the game, and
/ OF course. those who do not ike the game
need not play.
/ When the bears were trying their hard
( est To bring about a reaction in the mar
ket they circulated a report that a house
thar handles a good deal of business for
one OF the most reckless operators on the
/ bear side had covered 100000 shares of
stock at the end OF last week. bat close
observers of the trading said that was a
story which might possibly be believed by
the marines. but certainly would not be
accepted i'm Wall street. as il was totally
at variance with the most careful observa-
ti0ns of what was really going on OF
course. It was easy enough TO see why the
bears should wish TO give the impression
that they succeeded in covering large
part Of their contracts.
just at present one OF the most impor-
tant factors in the market from the bull
standpoint IS the enormous short interest,
and a good deal Of stock is held specula-
lively in the belief that much higher
prices can be obtained for L when the
covering movement gets under strong
headway. II at the critical time in their
affairs the bear operators could induce
those who are holding on 10 believe that
their hopes of higher prices were based on
a short interest that no longer existed,
there might be such an amount OF profit
taking by those who are long and Or hort
selling by traders looking for a chance 10
play for a reaction as to facilitate the re-
tirement Of their own contracts.
It would not add TO the peace Of mind
Of those who are short Of the market II
they could see the transfer books Of the
big corporations and trace therein the in
vestment absorption of the stocks they
have so recklessly sold Taking a single
instauce-the transfers Of stock in one of
the large railroads indicate very clearly
that about 100000 shares of this issue were
taken out Of the street in the past month
not by large interests which generally
conceal their operations as long as they
can. but by scattered investors who took
small amounts on the average.
IN regard 10 the knowledge of where /
the stocks have gone TO. the bears Of to /
day are in the same position as an opera
tor who cut a considerable figure in Wall
street some years ago. This operator once /
called at the Office of one OF the large /
railroad companies and said he wanted /
TO see the transfer books. Of course the /
permission was refused. but one of the /
officials asked indifferentIy; Are you in /
terested in the stock2" Interested" was
the reply, I'm short 50oo0 shares. - To-day /
there is not merely one operator but sew /
eral, who could say this.
American Smelling and Refining was /
one OF the earliest bull cards. and those
who had watched the action OF the stock /
on Friday had little hesitation in playing 4
H. That there was a large short interest /
had been made quite evident at the end /
Of the past week. and il was only the in /
terferenee of the large insiders TO pre- 4
vent the elimination of this factor Of /
strength that prevented the movement
from assuming large proportions then.
The short interest was not however,