The Washington herald., 1907-04-14
Leading Stocks Generally
Show Sharp Declines.
RUM0R MILL HAS BUSY Day
sIany Unfounded Reports Spread,
but Little Credence Is Given Them.
Made Of Report Of Increased DivI-
dend-street Interested In U. p.

| conducted on the side Of declining prices
produced their effect OF a hood of Hqui-
dalton which overtaxed the absorptive
powers Of the market and carried prices
downward at a pace much Iivelier than
the rally from the low Of last month had
been at any time except on the day after
it first became evident that large inter-
ests had determined to step into the
breach ana retrieve a situation In which
! the bears appeared to have had every.
thing their own way.
! All the leading stocks declined sharply
and the only change from the generally
/ downward course of prices was a small
/ rally just before the c:ose that did not
/ reflect anything of greater consequence
/ than the covering over the weeks end of
1 a few speculative commitments for the
1 decline. One of the most discouraging
things about the decline was that there
1 did not appear to be any well-defned
/ reason for It. That long stock was sup
| piled all through the session almost every
( body was forced to admit, and that the
support was not very good even the bulls
could not deny. AS one discouraged bull
said, the best thing about the market
was that the decline vas limited 10 the
duration Of a two hours session.
Never did the rumor mill work faster,
and never did it turn out a more varied
product There was enough. and more
than enough. 10 satisfy the most vora-
cious bear appetite. Only with the quail
ity could fault be found. Stories of houses
in trouble or so much weakened that
they would find It necessary to wind up
their affairs and retire from business on
May 1, Of business contraction, of new
note Issues pending. Of the most drastic
| kind Of action against the Hartman lines
and of new socialistic tendencies Ia poll
tics-thesa and much more were se4.aS
up for consumption. The rumOrs about
the possible retirement of some firms
from business were accompanied by such
circumstantlallties OF details as that Of
fees had IN some cases been subiet on
/ terms which meant a considerable loss on
original contracts. But accepting all this
as entirely true, il does not prove any
thing. for many reasons could be found
why a particular house might want to
give up its present location 1t might
eKpenses-not necessarily to stop alto
gether. Such minors did not furnish rea-
sons for the markets weakpess.
AS a sort of auxiliary 10 the stories Of
prospective borrowing by Union Pacific
it was r'Imored that Mr.. Hartman would
be forced out Of the presidency OF the
road Had It beeR merely said that he
would resign. the intent to utilize the
story as a bearish argument would not
have been so clear. That he would be
forced out conveyed an intimatlon of
friction and was, In fact. an insidioua
reminder Of the stories current not very
long ago Of ap alleged lack of harmony
in high financial circles. From the reiter-
alton Of the rumors about a change in
the price Of the road whenever there is
need Of a reason to account for weak
ness ia the stock, il is evident that the
street regards Mr. Hartman as an able !
railroad man.
On Tuesday last American Smelling and /
Refining sold as high as 1854. and there /
were predictions that before the end Of 1
the week the price would reach 80, which /
would have involved a further rise of /
ll& points, Instead, the price has since /
moved the other way by Just that number /
Of dollars share. To-day. when the /
quotations. according 10 prediction, should
have been 11% points up, it was 1l& or
l2 points down, the stock dropping to 126hl /
and closing at only a fractional advance /
from the lowest. The rise at the begin i
ming Of the week was made or very def /
mite stories about an increase in the divi-
dend rate from Z per cent TO 10 per cent /
a year but as at that very time a divi-
next period was therefore nearly three
months of, il was obviously quite too
easy 10 speculate with any confidence
upon such a contingency.
The weekly letter OF a conservative
house says
up 10 the middle Of January the bor-
rowing demand for stocks was very small
and almost every one apparently wished
to lend them at the fair prevailing rates
for money, as the easiest way Of carry
ing them; while nov. with few excep-
tons. there are more borrowers than
lenders Of most stocks. and quite a num- /,
Der of stocks are very scarce, while a
great number Of the usual lenders have
sold out and have no stocks to lend. We
would be the last 20 argue that an exist
ing short interest is a reason for buying
stocks: nine times out of ten It is just
the opposite. Especially is this so when
there is a concentrated short interest in
one particular stock. No doubt many
people buy in such a case having recoI-
lections Of corners and hoping to see one
develop; but it rarely happens that the
sellers do not know more than the buyers
In such cases. When, however. it is the
fashion for very many of the speculative
public to trade on the short sids. the
above reasoning that IL is not wise. to be
long on a scarce stock does not apply No ,
doubt there are many conditions Of the {
market when a widespread short interest
Is merely a proof of widely-diffused
opinion that circumstances are not IA
vorable to an advance, and IN sense
this is such period. This feeling has no
doubt kept many investors out of the
stock market The stock exchange his
tory of the last month was largely infu-
anCed by such a feeling, but the fan
brought in q very large number of out
side investors and the floating supply of
stock IN Wall street must be far below ,
an average. and we, therefore. believe :
hat stocks are purchase for a good 5
turn on weak points"
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REV YORK MONEY.