The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-01-21
LIQUIDATION is FELT
Plungers Unload for Safety
and Hurt Market.
HILL AND HARTMAN STRONG
Their Stocks Weather Break I'm
Prices ConspicuOusly-Disa
and Common Steel to Advance
Dividends Influences Securities.

j
last week. or during the greater portion
of the week. was governed by the same
reactionary tendencies as those which held
sway during the week preceding Rea-
sons in general for this seemed to be Of
twOfOld character
There appeared 10 be an underlying fear
that although ease had developed in the
money market. and the general money
situation here and abroad was showing
distinct Improvement, yet that this ease
and Improvement might be only tempo
rary. and that after a month or a few
weeks of relatively low money rates the
price of financial accommodation would
again rise ana hold for a long time at
high level
Liquidation Hurts Market.
In the second place there was great
deal of liquidation in the market, caused
by the selling Of stocks by spectators Of
the plunging class who had found. as Op-
orators of this sort often do, that they
had overloaded themselves with margined
holdings of securities 1t is believed that
financial help was accorded to many
such operators over the end of the year
settlements upon the understanding that
such assistance was TO be only temporary.
and that after the middle of January they
must once more carry their own burdens.
Again Spectators in Wall street were
inclined 30 place a pessimistic construc-
ton upon the statement put forward by
President Finley. of the Southern Rail
way, in which he dwelt at length upon
the needs OF his company for new track
Fg.
kind for the transaction of business and
set forth the high cost at which these IA
Cllities would have 10 be procured. The
implication was. Of course, that all the
railway companies were laboring more or
less under the same burden. An influence
of the same kind was the very forcible
letter sent by James J. Hill To the COVER
nor of Minnesota, which preceded Mr..
Finley's letter in point of time, and Of
which indeed. Mr.. Finley's statement was
III the nature of strong COrrObOratiOn.
Mr.. Hill declared that while the rail
ways Of the country were in pressing need
OF new cars and engines with which TO
move freight and passenger traffic. their
greatest need after all was additional
tracks and terminals
Some Depressing Influences.
Specifically the security market was
hurt during the week by the fan in the
Southern Railway and Erie stocks. by the
casting down Of hopes among operators
for the rise in the Amalgamated Copper
shares that the dividend on these shares
would be advanced. and by the growth of
feeling that the next dividend on United
States Steel common stock would not be
increased. The decline in the Erie issues
seemed to be largely in the nature of
drive made against them, based on the
presumption that the Erie road must soon
be a borrower of money. and helped by
the knowledge that the syndicate that a
year ago bought the issue Of S12.Oo0. 900
series 3 Erie convertible bonds had re-
Gently dissolved and had distributed the
greater portion of the bonds uns0Id among
It's members. Heavy selling of Chicago
and Northwestern stock was the almost
inevitable greeting in the present temper
OF the market accounted TO the formal
announcement that the Northwestern di-
rectors had decided to issue $3.50 0.l0o Of
the ND-G1s-1 stock recently authorized
by the cora-. MS stockhel6e--
The action al the Amalga ta1 Copper
directors IN leaving Their Cua rrarlv diyf-
dend rate unchanged had for several DAYS
been foreshad0wed by the market course
Of the stock, and although it naturally
disappointed those who had expected TO
see the annual dividend rate of the stock
placed On a 10 per cent basis and had
made financial commitments accordingly.
ii was not regarded unfavorably I'm other
quarters. Current estimates Of the an
nual net earnings OF the Amalgamated
Copper Company at present have run all
the way from so. 800 90 10 S4OO1O000. and
the ability Of the company TO make an
annual distribution of 10 or l. per cent
upon its shares is unquestioned
Hill and Hartman Stocks strong.
Up to the very last part of last week
there were many active and prominent
stocks in the market that did not decline
at all or only 20 a trivial extent Save
in the half panicky break that occurred
on Friday the Hin stocks, that is to say.
the Great Northern preferred and North
ern Pacific shares and the Great North
eTn ore certificates. stood like a rock.
Likewise at all times but during the end
Of the week decentralization. the Southern
Pacific. Union Pacific. and St. Paul shares
were conspiCUously strong There was d
plain reason for this in the case Of South
ern Pacific. at least
The Southern Pacific earnings are now
increasing at rate unmatched by that
OF any other railroad system in the land.
It's net earnings increased over > per
cent I'm the last five months of 1906 and
il IS believed that present earnings are
at an even greater rate. Should the com
pany do as We'll in the last half of its
current fiscal year as il did in the first
half It will earn Il per cent upon its
common stock, so that an increase Of its
present dividend Of per cent would
seem strong probability.
The only question concerning the future
of the market discussed as the week
closed was, of course, the probable ex-
tent of the purely speculative liquidation
that seemed to be in progress. When a
selling movement Of this kind sets in no
one can tell how far il will run, and but
one general statement may be certainly
made about it. namely. Jhdt it Will almost
certainly run further than 1t should and
depress prices with just as much unTeasOn
as they We're previously advanced. II
must be recognized by every sane indi-
viduaI that the enormous fall in values
that has occurred has served to make
differences concerning the course of prices
in future far more hopeful than might
have been the case six months or even
swelve months ago.
During the past year prices of the lead
ing railroad stocks have been marked
down over fourteen points, and there has
been an even greater corresponding fall
in the price OF bonds and similar securi-
ties \ market in which such a purging
has occurred. and which is based upon the
still uHdminished prosperity OF the Coun-
try, can hardly be said 10 be in an IN
healthy state. Attention, too must dwell
upon the fact that some of the best stocks
in the market are now selling on the basis
of an interest return of between and
per cent, the yield being in many cases
naarer ner cent than b Thesa facIs