Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-01-20
Stocks Have Been Notably
Depressed Past Week.
MONEY LESS. STRINGENT
Market Felt Contemplated Demands
by Railways.
INFLUENCE OF TWO BOND ISSUES
Underwriting Had a Sinister Effect
on Speculative Sentiment, but
Prices Closed Strong.
MONEY LESS. STRINGENT
INFLUENCE OF TWO BOND ISSUES

Prices Closed Strong.
NEW YORK. January 1a.-The stock
market underwent severe pressure from
further liquidation today. Prices broke
again and again under the renewed food of
stock which poured upon the market.
There WIS an evident determination, how
ever. to protect the market. and support
ing orders a.qCared at each decline to ar
rest the downward tendency and rally
prices Tho nature of this buying in
dictated by its withdrawal when it had ef
fected its purpose of steadying the market.
II was not pursued at the advance, when
prices approached last nights level.
The market closed with such support
ing movement in progress and the tone was
consequently strong at a final rally. al
though extremely feverish and very &C
tive There was continued lack of any
immediate development in the situation to
explain the volume and the urgency of the
selling. 1t obvious that 4 strong or
ganization Of hear operators was active and
alert to take advantage of any sign of
weakness. and their raiding tactics were
effective in dslodging weakened speculative
accounts.
1t was generally supposed that liquidation
was in progress Of some important
counts of long standing and in syndicate1
form, which were being thrown over to re-
1ieve an overstrained position in the mar
ket and for the protection of BROKERAGE
houses. Individual brokerage houses did
not escape rumors of money difficulties.
and many vague rumors were kept in con-
slant circulation also OF a less specific
character Many diligent INQUIRIES we're
set on foot rs a result of these conditions.
and clearing house and banking authorities
gave their sanction to assurances that
evidence Of e-r7harra ssment was dscern'hle
The princnal selling pressure conferred OF
Reading. Union Pacific. Southern Pacific
and. after a show % strength. ST PauI
Weakness Followed Bank Statement
The market showed the most acute weak
ness after the appearance Of the bank
statement. when enormous offerings of the
stocks above named came UPON the market.
The s1s los eco cash gain hv the hanks was
much in excess of expectations. The S1J.-
$4,000 loan increase was attributed to n
larg" transfer of loans from London to this
market.
The continued strength Of foreign ex-
change indicated an extension of this pro-
cess. Money rates rose also in London.
The apOarent concert Of unfavorabe crit
icism az American securities and finance bv
the foreign press is depressing factor
owing to it's probable discouraging effect
anv intended purchase nv Foreigners Of
American securities. An underlying infu-
ence on the reimbursement of prices in prog
rass is the contrast of the cater attrac-
lions to he offered by new securities and
the disposition to provide means for taking
them up by liquidation nf outstanding
curities at = corresnondinglv higher range
of prices. Total sales of bonds, par value,
81 512nO
Stocks have been acuta,v depressed this
week by important liquidation. the sources
and motives of which have given food for
varied conjecture and Interpretation. There
has been pronounced relaxation in the for
mer stringency of the money market and
the entire lack of response to this improved
condition In the stock market has had
very discouraging effect on speculative SEN
timent. The successive DEVELOPMENTS to
show the huge requirements in contempla-
ton for additional capital by the railroad
companies have been regarded as having
portentous significance and have upset con-
fdence in the sufficiency of the available
resources to meet these heavy demands.
Some Striking Incidents.
There have been number of striking in
cidents during the week which served to
bring the subject into conspicuous notice
and to reinforce the effect of previous de-
velopments in the same direction. The in
fiuence had not vet been dissipated of
the large stock increases of the Great
Paul and especially the unexpected de-
mands formulated by the Pennsylvania. the
successive announcements in those cases
showing a progressive increase in the mass
of new securities threatened which proved
greatly disconCerting to the market. Specu-
lative opinion therefore was in state
which made il sensitive to the influence of
disclosures of an indefinite extension of this
kind 80 requirements as well as TO news OF
the poor success Of a number of issues
which have lain dormant in the hands OF
underwriting syndicatcs. Public utterances
from three influential railroad and financial
authorities were incidents to attract close
attention in the financial district under the
circumstances.
President Hill Of the Great Northern went
on record in an opinion that the expenditure
of 81 1Gu. GNn 600 a year for five years 70
come would not serve TO provide more than
the requisite facilities for transportation or
the traffic now offered to the railroads. ana
calling for accommodations If the prosper
ity of the country's business is 70 be main
tanned President Thomas of the Lch'gh
Valley ard President Finley OF the South
crn railway pursued the argument more
along the lines Of the great augmentation
in cost of materials and labor In the ner-
fertirg of the necessary hcttcrTents and in
operating of the railroads with the bar to
CORRESPONDENCE growth IN revenue fixed by
the legal restrictions on charges for tra~s-
portation already in force and threatening
n large extension in response to the pubic
agitation toward that end.
Railroad Reports.
These reports Of railroads with shares
and securities selling at lower prices in the
market and with corresponding disadvan-
tages in their rate of credit for the raising
OF new capital intimated the need OF EN-
ployment OF available net earnings in place
of resorting to new capital issues, to be
sold necessarily. at a discount and at heavy
cost. Low-priced railroad securities were
sensitive to this line of argument, and
weakened sharply with the circulation OF
rumors of intended suspension of dividends
and the diversion of earnings to the needs
of betterments. A deep impression was pro
duced also by reports OF the results of I'M
derwritings OF two bond issues the effect
being the more marked is the fact that
both bonds were of the convertible class.
which is that relied on to further the sue
cess of appeals for large capital subscrip-
tion in either case. 1t became known that
the purchase of So, 900 0G0 of notes of the
American Telephone and Telegraph Com
pany. although made at a price to yield a
large interest rate. carried with 1t as an
additional consideration the reduction OF the
price of the underwriting Of the S10O0OO,0O0
of convertible bonds of the same company
said to be from 90Ls to ~. This concession
was due TO the impossiblity of finding a
market for the bonds at the syndicate price.
Ii was reported also that the dissolution
OF fho TO ,1cr rnfa -