The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-05-19
GOSSIP or WALL srREET.

why this should be SO. Professional senti-
ment was bearlsh and the kind Of news on
which II had sustained itself on preceding
days-the further deterioration Of the grow
ing cropS-was no longer available. as the
reports from the West told OF warmer weather
and generally favorable conditions. Under
such circum stances the subject OF corpora
ton borrowing was resorted to as on account
OF the number Of companies that had been
obliged 20 appeal to the money market within
the last ten days or so IL possessed suf1cient
vitality to make 1t a serviceable factor In
bearish operations. No very specific In.
stances OF pTospe ctive issues OF new securi-
' ties or Interest bearing obligations were mem
toned. but from the generalities Il might
almost be supposed that every trader knew
for u certainty that the railroad and other
corporations would soon be engaged In a
grand struggle for whatever money there
was to be found in the Street.
4 characteristic rumor on the subject Of
new financing was that a New York cor
/ poration would soon come into the money
market with a demand for new capital on
q much larger scale than any company had
done in a long while. No name was mem
TONED. but as InterborouRh-M Metropolitan was
at the time making the lowest record prices
in its history and as the company was q New
York corporation. the traders soon fastened
''S s''AhaNf W" " HNs = hhS AhOhS Ne'
to do re because rumors on the same subject
had been heard before and had gone uncon-
tradicted, although those In which the name
OF the company had been mentioned did
not speak OF any very large needs. The best
informed opinion was that the company
would not be under the necessity Of borrowing
on a very large scale now, but the extreme
weakness in the stock made tome of the trad
Ing element willing to believe almost any
thing.
An important factor in causing the de-
cline In Jnter-Met was the failure Of
the company, according TO It's own state
ments OF earnings, to come anywhere near
fulfilling the prediction voiced by official
authority q year ago that the system would
not only earn all 1red charges and preferred
dividends. but would show q fair annual
surplus for its common stock. But while the
preferred dividend has not been earned some
Of the rumors put into circulation failed to
take notice Of the fact that the company has
in its first year earned something over and
above all fiIed charges. including guaranteed
dividends. and has made progress enough to
encourage the hope that not only can IL con-
tinue to meet all its obligations. but that In
the course OF a year or two II will earn the
dividends on its preferred stock. The open
ing OF the Brooklyn subway within a few
months will mean a good deal in the way Of
Increased revenue WITHOUT duulnR 10 the
iIed charges. and will make the problem OF
earning the equivalent OF the preferred divi-
1t Is paid or not-much easier
Of solution than It Is at present.
When the Sire ct had settled on the con-
clusion that Inter-Met, after endeavoring
to place a tl5, 90 5000 note issue. had decided
to let the matter go over until later in the
year II began to turn It's attention 10 the
ala 0nd mazda ~ prnolYlrp papid Trapait
and by the time the market closed the sum
which IL was said this company would require
had grown to an amount equal TO about the
entire issue Of capital stock. As the total
was increasing with acceleratinR velocity
there is no telling what It might have grown
to had, not the early closing hour interposed
to cut II short. But disreRardinR extremes
there was a widespread belief that Brooklyn
Rapid Transit would need a considerable
sum-variously estimated at from sl0.O00 900
to go, 900 ,OOo-to finance the extensive scheme
Of improvements that II has had under way
for q long time past and which Is designed
only to increase the gross earning power
OF the system but TO make possible a con-
siderable reduction in the relative cost of
operation. The company, OF course. has
still q large amour OF its convertible bonds
available, and II was supposed that the per-
mission obtained from the Railroad Com.
mission n few days ago for q bond issue by |
the CanarSie Railroad and for capital issues
by other subordinate companies meant
that the new securities would be used as addl-
collateral TO secure the parent oom-
bonds 80 that q block OF these might
he placed upon the market. On the other
hand. the theory that on account Of the rela-
lively low value OF the conversion privilege.
assuming It to be fixed at par. temporary
financing might have TO be resorted 20 had not
q few advocates. There were 90 many
some Of them contradictory. many
OF them absurd. all OF them incomplete. that
II was evident there was little more than
guessvork and probably bearish activity TO
base them on.
In var GUS places attempts were made TO
the rumors about q large new note Issue
to the United States Realty Corporation. |
whose stock. althoug Oh very inactive, suffered
q rather heavy decline, dropping to a level
lower thar 1t had before sold since IL was
placed on a Q per cent. dividend basis q few
months ago. There was nothing whatever
to sustain the rumor beyond the general In
ference that as the company has been en-
faFed IN some expensive construction work
within the past year II may have used UP q
good deal Of It's working capital.
Even United states Steel could not escape
The rumor mongers. whose ~favorite theme
tine nC0u Vi . Cubltoit diu " Nhh VI |
around that this company would soon sur
prise the Street by announcing an issue OF
new bonds. This would indeed be a surprise,
20 much 90 that nobody believes there lie one
,hance In a thousand that IL will come true.
Steel Corporation 10 very strong In cash
and cash assets and lie more likely to be q
Iender OF money than q borrower under eI-
conditions. For some days past there
has been a rumor that the corporation might
buy control OF Ten Coal. giving it's 5
Der cent. bonds therefor. but the story has
little credence IN any quarter. Yes
terday's version was still more improbable.
The more favorable weather In the West
the decline In the grain markets did not
help stocks, for traders were Of the opinion
that there was scattered liquidation. and for
his reason were not inclined to recede from
their position on the bear side. They oon-
willingly that the borrowing demand
Tor stocks was large. but they argued that this
not necessarily imply q heavy short
oontendins that o good part OF
he borrowing was done by sellers who had
The stock to deliver but preferred to borrow
10 40 TO conceal the real nature Of the opera
lions that were under way.
~. . ~. h,IIs an ITntnr p.niAa h.x.