The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-01-05
EXPECT STOCK BOOM
Traders Confident that Prices
viii Soon Be Upward.
UNION PACIFIC HEARING IS ON
Estimates of TO-day's Bank state
ment Are Highly FavorabIe-YIOney
in Security Markets Are Ripe for
Advances-LOndOn Reduces Rates.

New York, Jan. 4-On the first day of
this year attention was directed in this
column, in the review of the course OF the
security market on the preceding day. the
last business day Of 1906 TO various signih-
cant developments which strongly sug-
gested at least that great change for
the better had come over the general
financial and speculative situation.
That was the day on which the final
calling in OF money occurred for the
January disbursements, and on which
whatever financial strain was to be ex-
perienced would be felt TO the fullest ex-
tent. The result showed that the strain
thus felt was not nearly so great as had
been expected, the logical inference be
ing that liquidation in the stock market,
in anticipation Of the event. had already
been thorough and complete
There We're signs, even last Monday,
Of a tendency toward a lowering OF rates
for money. both in London and in this
market, and as the week wore on all
these indications became materially
strengthened.
Investment buying of large stocks put
in an appearance in London, and the
financial position there was further rein
forced by large remittances of money
from this side which forced the price of
sterling here up 2ls cents in the pound
All these indications went naturally to
show that there was such a relaxation
Of the money situation in London that a
reduction in the Bank of Englands dis
count rate in the course of the present
month was more than likely, and, indeed
II appeared to be the general belief in
English financial circles to-day that this
reduction would certainly take place with
IN the next fortnight. provided that the
foreign exchange continued to hold as
greatly in favor of London as they have
done since the beginning of the year
Call Money Rates Normal.
Here every development that has taken
place during the week has been such as
To work for better feeling regarding the
stock market. Call money rates have
sunk steadily throughout the period. the
average price for call funds to-day being
. per cent while time money accommo-
datiOns, although still nomnally quoted
by certain leading lending institutions at
high figures, are yet actually arranged
on much easier terms, borrowers being
very unwilling to pay more than 6 per
cent for the use of funds for any period
Six per cent was, indeed the rate Off
ciaIly quoted to-day for time funds by the
leading banks.
Estimates of to-morrow's bank state
ment, compiled from data taken at the
close OF business tonight, were for a
gain by the banks of something over
100000 with hopes that the gain by the
banks, as reported. would be somewhat
larger than this, owing 10 the fact that
remittances from the interior in consid-
cradle volume are being continually re-
celveI
A matter that TO "a greater or less
extent has made for depression in prices
during the week has been the knowledge
that there would to-day be begun an in
vesugation by the Interstate Commerce
Commission of the relations Of the Union
Pacific Railroad Company and its subordi-
nate systems. and of the general financial
dealings of the company. In so far as
testimony was to-day addUced at the first
session of the investigation, which was
held in this city, il was commonly con-
strued in Wall street as being favorable
10 the Union Pacific organization
Revelation was made of the full extent
Of the holdings OF the Union Pacific COM
pany of the stocks of various railroad
corporations not comprised in the com
panys last annual report, and this proved
that the Union Pacific was the owner Of
large blocks of the stock of the St Paul
Chicago and Northwestern, Baltimore
and Ohio. New York Central, and Illinois
Central companies, the holdings being so
large in some instances as 90 constitute
a practically dominant interest. It also
appeared that the Union Pacific had
bought all these stocks with money out
of its treasury, and had not run in debt
for any