The Washington herald., 1907-02-06
WALL STREET NOTES
New York Central WithhOldS
It's New Stock Issue.
STEEL BUYING IS A FEATURE
Expectation Of Increase i'm Dividend
Leads Strong Interests 20 Add to
NEUTRALITY-SUSPICIOUS. stocks show
stFenEth-BuyinG Of 1t. PuuI IL of
Excellent Character and Sustained.

, H. -
day before the sale of S25.O0OOO0 short
terra notes to prominent banking firm
was announced. New York Central stock
sold as high as 13o The stocks since sold
down TO 12Pz. but recently there has been
"a tendency toward recovery. Had the
company decided 90 sell stock at par in
stead of selling notes the rights would at
first have had "a nominal value Of about )
per cent. but this would have shrunk to
about ( per cent at the low level reached
ON the decline.
/ 1t is, however. well-known fact that
when the market is under the control OF
strong bear party a new issue Of stock is
treated as a strong argument in favor Of
lower prices on the ground that the in
crease in the floating supply Will make il
more difficult FOR the bulls 10 sustain
/ prices. At the time the note issue was
authorized the market was undoubtedly
under the control of a very strong bear
/ clique. which would not have lost an op-
Iportunity 10 hammer q stock of the promi-
hence Of New York Central If given a
plausible prctext. Instead of putting the
stock down to 81 points they might have
/ had there been sale of stock instead Of
notes-have succeeded IN driving il below
l2o. and, perhaps, TO the level Of BaIti-
more and Ohi0-another per cent issue
and the rights of an original nominal
value Of > per cent that have thereby
come 90 De quoted at about ~. The value
/ OF the rights would not. therefore, come
anywhere near compromising the stock
[ holders for the shrinkage on the market
price Of their stocks, and the melon would
have turned out 20 be the surest kind of a
lemon.
/ II may be argued that even If New
! York Central had issued new stock and
: the price had temporarily declined in con-
I sequence. the Spectator only and not the
/ investor would have suffered This is 81
/ very narrow view. The rich investor
could look on a decline in the market
/ price Of the stock with Indifference so
/ long as he felt sure as 10 the return on
/ his Investment point on which in the
case OF New York Central there can be- no
questiou-but there is the investor Of
moderate means whose investments must
! be Of the liquid kind, because. he may a.
Hany time be- called upon 20 realize n
order to meet some stem OF expense , ct
entirely foreseen at the date Of making
his purchases
1 Investors Of this class hold a by-uo
means inconsiderable amount Of the best
railroad stocks. and IL is nothing more
+ than common justice To them that the
roads in making their financial plans
should not disregard their interests. It
may Well be doubted IF even the specula-
/ tive holders Of the stocks should be dis
regarded by the managers of corpora
ton when a scheme Of financing IS under
dor @
their favOrite mediums Of speculation. and
many of them. while constantly trading
/ in and out. are on the average large hold
/ ers OF the particular stocks in which they
conduct their operations. They perform
an important function. being part Of the
digestive system by which new stock is
assimilated. and IL the supply Of new
stock Is more than they in cooperation
with the regular investors csu properly
digest. congestion results. and the weak
cned position may have an injurious effect
all around.
Taken altogether, it is matter of con-
graduation that the directors OF New
York Central decided 20 finance the roads
present needs by means of notes-espe-
Cially as ON the maturity of these short
term obligations the stockholders may be
given an opportunity % subscribe for
stock for permanent financing when the
rights viii have "a substantial value. and
when Wall street will hail them as "a bull
argument instead of "a bcarish factor
II IS an interesting coincidence that the
broker who yesterday sold Great North
eru down To the lowest price Of the year
was one of those who on the DAY when
the stock was first quoted ex the ore
certificates made 10 sell I'D TO 40. from
which it quickly dropped to 100. not 10
rise again to the equivalent Of that price
since. For to-d8ys break various rea-
sons were given, SUCH for instance. as
that there was selling for the esta. of
"a weil-knowu Wall street man who died
recently; that the snow blockades were
causing great loss 10 the road. &c. but
lt may be that the selling was as much OF
the character of manipulation as the buy
ing that had caused the sensational rise
at the opening on the morning when the
stock rrst sold 81. the certificates. For
operations of that kind il is idle TO at
tempt to find an explanation.
Probably a good deal of the buying Of
United States Steel is still IN the nature
of covering of short contracts. but il IS
reasonably clear that there has been more
or less accumulation by interests which
which believe that the outlook for an in
crease in the dividend at the April period
IS very bright BY that time the stock
VIII have been on the present . per cent
basis for g. full year. and the prospects
Tor the current years business can he
estimated with reasonable accuracy If
these prospects are then as good rs from
present indications they seem likely 10 be
there viii be as much conservatism in
making the rate 4 per cent as there has
been in holding it since last summer down
TO per cent basis.
After "A sharp decline in the first hour
Minneapolis St Paul and Sault Ste
Marie recovered with some vigor, and
Canadian Pacific also showed substantial
strength. Apparently the street is begin
ming to realize that the snow blockades
viii not last always and that even now
some trains are moving in the North.
The Hartman stocks showed something
OF the strength that might nave been ,x- /
pected from the sort of buying that had
been seen in them at the end of last week |
and again on Monday. That WAS accumu- /
laion by strong interests conducted in a /
way TO gather in the largest possible 1
amount Of stock at the lowest prices. The
accumulation HdNlhS Dten CHeCted. there /
Is 40 longer the effort to keep the price
down, and those who are forced to buy /
for the purpose of covering shorts find /
that to do this they must bid up quota |
tons.
NEW YORK MONEY.
New York. Feb Money opened at 3 per cen,
highest 3; lowest .; closing 9ls Most Of the loans
were az "a
Time money vas unchanged being offered in mod
crate volume and meeting with fair demand
Rates. PCT cent fer thirty 20 sixty days: So Der