New-York tribune., 1907-05-10
Enlisted.
Closing pxIces of active bonds dealt IN, with
net changes follow:
STOCK MARKET OPERATIONS.


Announcement of new Union Pacific financing
on a large scale was responsible for a sharp
decline in the stock market yesterday afternoon
following a period of advancing quotations
Wall Street at present does not take kindly
new stock and bond issues and it is especially
bearish whenever the question of raising money
by the Union Pacific is concerned. despite the
fact that the company is one Of the biggest
money makers among the railroads. The Street
believes, however, that Mr.. Harriman's plans for
the development Of the Union Pacific are running
along lines that Will impose serious burden
upon the company as we'll as upon the money
market. and it is pointed that in the event
of year more of poor crops and business
depression there would be possibility of
maintaining dividends Union Pacific and
Southern Pacific az the current rate of 10 per
cent on Union and per cent on Southern par
ticularIy in view OF the increased charges which
will result from the proposed issue of s75,OOO.OOO
Union Pacific convertible debenture bonds and
s36 100000 Southern Pacific preferred stock
Southern Pacific has floating debt of $32300.-
900 and Union Pacific has on its books advances
of s63,6S3000, including payments due on the
acquisition of other lines. and though the Union
Pacific has free assets in its treasury of $24S,-
100000 and 1928 miles OF unmortgaged road the
directors of the company, the advice of Mr..
Hartman, nave decided 10 nnanCe the needs of
the Hartman system by putting out convertible
bonds and by having authorized an issue Of
common stock of 100000 600 S40,00O000 of
which will be reserved for the conversion of the
proposed bonds. The question was asked
yesterday. but not answered why the company
did not put out some of It's preferred stock which
was authorized long time ago but never issued.
Some people in Wall Street whose opinions
are entitled to respect believe that in view Of
the splendid record made by the Union Pacific
company in the last few years in the matter Of
earnings and the indications of more than 16
per cent results on the common stock in the
current year the directors would have increased
public confidence in the securities of the
pany if instead of issuing convertible bonds they
had used some of their treasury assets TO meet
the urgent requirements Of the property, or else
! had issued preferred stock which already has
! been authorized. And it also argued that it
would be better for the company to reduce divi-
/ dends from the extravagant 10 per cent level
! than to increase interest charges. Opening at
! 1861, Union Pacific advanced in the first few
/ hours of trading to 149A, and, following the an
nouncement of the bond issue, declined TO 14112,
| closing at a slight rally at a net loss of 3A
points. Southern Pacific also declined, while the
entire list sold off though final prices as a rule
| were not at important losses, an average of
per cent being recorded in the active list. Early
! trading extremely light, while in the last
! hour the volume of business throughout the list
expanded at the expense of values, with the
heaviest dealings in the Hartman shares, Read
! ing, Amalgamated Copper. American Smelling
Atchison. Pennsylvania and United States Steel.
There also some activity in the INTERIOR
ough- Metropolitan issues and Brooklyn Rapid
| Transit. which declined under selling pressure
| based the good prospects for the passage of
the utilities bill One Of the considerations af-
| fecting sentiment based on the terms of the
Hartman financing. which appear to indicate
concessions from former issues and unfavorable
| investment conditions.
Foreign exchange bankers who are we'll posted
| regarding the international money market do
not look for exports of gold from New York 10
London Paris. pointing out that if shipments
| of the metal were 10 be made time money would
advance at this centre and bankers would draw
their long bills. which in turn would cause a de-
cline in foreign exchange quotations. Early in
the winter Paris lent considerable amount of
money in London. but the greater part Of the
/ loan has been Iquidated. while as far as this
| country is concerned there has been no i'm
portant borrowing abroad outside of that
| gotiated in 1906 by the Pennsylvania Railroad
Company in Paris. And New York II is learned
has not been lending any money to London
Monetary conditions in London have improved
materially in the last few weeks, a reflection of
which is presented in the Bank of England's re-
| turn for the current week. showing a percentage
of reserve to liabilities of 46 20. compared with
1895 at this time last and 5O.21 in the
/ same week in 1905 In Paris and Berlin condi-
tions also stronger, with indication OF
trouble in the near future the development
of a position that would make necessary the
withdrawal OF gold from the United States for
foreign account 1t may be stated as a fact
fbay rha 0f he
tention of Withdraw wing at present government
funds from depositary banks. and ii is not at
all improbable that he will pay off the balance
of the government As. which mature in July
! from money held In the Treasury vaults. espe-
cially as the federal receipts expenditures
/ continue heavy In the first nine days OF May
surplus receipts exceeded payments by more
than S4.50000O. indicating an excess for the
| month of more than S15.0o0,000. There is no