The Birmingham age-herald., 1907-05-12
.STAGNATES DESPITE POOLING BY BULLS Union Pacific Boast Was Not
 Very Successful lNDUSTRIALS ARE TOO HIGH Leading Commentator Thinks Busi- ness In Metals Will Continue
 Good Even After Real
 Trouble Begins.
INDUSTRIES ARE TOO HIGH
BY w. G. NICHOLAS.

New York, May 11.-(Special) Despite efforts of bull pools to put ginger in the market, it stagnates-the usual aftermath of long and serious decline in prices The attempt to put new life in the whole list by lifting the price of Union Pa cific hasn't been very successful The street wants more information about the crops before committing itself to a bull speculation. The reports that have come from the wheat belt haven't been very rosey. The big crops in the west have, year after year, been the real basis of the bull speculation in Wall street. and when things have looked worse the big crops have given the street new courage.
 The idea that Union Pacific preferred will share equally with the common In any distribution of the treasury assets has given an impetus to the preferred stock. The strange thing about it is how such an important discovery could have been made at such late day. There Is $100 GOO, GOO of Union Pacific preferred out standing. The company has another $l00,- 00O,0C0 that may be issued when the direc- tors feel like it. This is the $1O0 100000 that MT. Hartman had authorized some time ago just because he thought he might need that amount of stock some day to buy the Atchson, the Illinois Central or some other near Union Pa cidc property.
 If the theory of the rights of the pre- ferred stock to participate equally with the common on any melons is correct, the sharp financial students should not over look the fact that the wider the melon is distributed the smaller the pieces be- come. If. for example, the Union Pa clfc treasury cut up $1G0OC0,0OO of as- sets among its 200, 900 shares of stock, each share of stock would get $50 piece of the melon. But. if the melon had to be divided among the common and preferred shareholders alike, then this $lO0O0O would be cut up into GOO pieces, giving each share of stock only $S3 1-3. If the extra $100, ,000, GOO of preferred stock was issued before the melon cutting, then each share would receive only $25. And so 1t is seen that while this ingenious theory is very bulish on the preferred stock, 1t is act ually bearish on the common stock.
 A leading market commentator thinks the industrial shares are too high Since the high prices of 1906 rails have declined about B points, Says he, Re duCing tfe matter'to percentages we find that both rails and industrals have lost approximately 29 per cent of their value. This does not dovetail True, conditions may tend to change these pro portions, but not materially. Crop fall ures should injure not only rails but industrials, for crops are the backbone of commerce. When the purchasing pow CT of the people is impaired commodities must fall in price. It is my contention that aside from what is shown by pre- cedent, we are now facing a situation which will lower the prices of industrial stocks materially. We hear a great deal about the excellent iron and steel markets and the large orders booked ahead. We have heard all this before Even after the real trouble begins business in the metals will contine good for time. Ord CTS are booked before the coming de- presson is apparent and projected ex- tensions are carried on voluntarily or through necessity even after the setback arrives The price of the common stock of the United States Steel company does not advance and although the company is said to be earning anywhere from 15 to 30 per cent on the junior issue they do nor increase their meagre dividend of per cent per annum. Why? Be- cause they know fell well there is to be a recession. Also we hear a great deal about Copper (the metaD and prices the maintained or bid violently upward The stock goes up point or two under manipulation and the directors refuse to unite the string they have on their 'one-half extra dividend. Why?"
 New York Central's low price in the March panic was $l11lb Since then a quarterly dividend of 11s per cent has been paid The stock had a 10 point recovery in April but since then it has been sagging back again, until now it is in the neighborhood of the March panic level. Meanwhile Union Pacific had ahont a 30 noint recove1.N. with only n