The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1907-01-12
GETS
f UNEXPECTED JOLT
Stock Issue of Pennsylvania
Cause of Alarm
AFFECTS CAPITAL SUPPLY
The News Came as Great Surprise
and Suggests Similar Needs of
Other RaIlroads-sIumps
Conspicuous.
AFFECTS CAPITAL SUPPLY

New York, January 11-Speculative senti-
ment on the stock market today received
a rude shock in the announcement made
late yesterday that the Pennsylvania rail-
road had In. contemplation the offer of
500, OOO.o 900 additional capital. The volume
of new securities thus indicated is in
itself sufficiently imposing to have
marked effect on the supply Of capital.
For several reasons the effect of the
news was aggravated. For one reason 1t
was a total surprise. Not one of the re-
cent large issues of capital have come
heralded by conjecture or accurate fore
cast. There has been no recent discussion
of an important additional issue of Penn
sylvania capital. On the contrary it has
been regarded as in the position OF hav-
ing already supplied most of its require
ments.
This was the impression created by the
official explanation of the company's
finances given out at the time of the sale
OF $50,000000 Pennsylvania bonds in Paris
last year. The sale of large holdings of
Baltimore and Ohio, Norfolk. and West
ern and Chesapeake and Ohio stock out
of the treasury, in the meantime have
caused a belief that even the additional
needs then indicated had been partially
supplied. The revelation instead that the
company felt in need of power to raise
S2oo,0 900 was accepted as an acknowl-
edgment that the actual necessities had
been widely underestimate.
The inference was suggested that SINH
lar miscalculations might be supposed In
the case of other railroads as the pressure
of traffic on available facilities has been
by no means confined to the Pennsyl-
vania railroad Meantime news continued
t. come to hand of the issue of long
term notes by railroad companies on a
basis of per cent or upwards to supply
immediate needs, and avoid the necessity
of an attempt to sell permanent securi-
ties in the present unpromsng condition
of the security market The most vulner-
able points in the days market were
stocks which might be assumed to be
most affected by possible need of add-
tional issues Canadian Pacific and New
York Central, next to Pennsylvania itself,
were most conspicuous
The northwestern railroads which all
ready have undergone the effect of new
capital demands were comparatively un-
affected The prospect of strong bank
statement tomorrow was of little effect in
checking the weakness in the stock mar
ket. although the money market was ap-
preciably easier as a result. The flow of
cash from the interior to this center dur
ing the week seems to have been heavy,
but estimates by the banks themselves
100000
In addition the sub-treasury operations
have yielded to the banks since the last
hesnk statement a sum of $2.56s,0OO The
at the dekn balance of the sub-treasury
over s200oNfing house today, which was
bursen1ents goo was largely due to dis
malls and doNor = transportation of the
for this weekNs not figure in the estimate
tion of the wen The stock market liquida-
the loan item Vk would operate to reduce
chase of notesAbut the effect of the pur-
which has hee,N Of various corporations
car only be conn made during the week
feeling over theEectured. The prevailing
ouirements o,-erhN enormous capital re-
llet precIuded Arranging the money mar
tion of the more inn favorable considera-
OF the money markeNnediate repenishment
The vieor of the II which is promised
was a Testimony To tAaly late in the day
hear interest left unlle dimensions of the
of the earfy rush tn Vovered as a result
pressure was felt durA sell The severest
when Pennsylvania touylg the first hour,
IRENE decline of 4 noinHhed 1854 an ex-
strong on the rally. anVs. st. Paul was
strong throughout the IN the tone was
ing. vt at the clos
Bonds were irregular
Total sales. par value s2v
United States old As, couIv 2lS,O0O.
4 per cent on call ION, advanced
Bonds.
u. s. refunGing 2s, registeredN
u. S. refunding Is, coupon .....lo4s4
u. S. 3s.i registered. ex-d. -. CASA
u S. IS. coupon :. 49,. :. N....to2
II. S. Old as. registered A ..lo2aA
II. S. old as. coupon .. .Ioo94
u. S. new 4s. registered ..lol
u. s. new as. coupon ..............N.. l2eNa
Louis e. Nash, unified as .129Ds
Southern Railway SIS .............K ooa4
NIIo3A