The Washington herald., 1907-11-01
WALL STREET NOTES
Holders of Stocks OH Margin
Pay High Rates,
BEAR ATTACK IS REVEALED
New York Central Certificates,
Bearing Name of standard oil
Capitalist, Appear on street, but
Significance Is in DOubt-Fear of
Dividend Reduction Causes Drop.

New York, Oct 31.-Customers Of COM
mission houses. who have had stocks car
ried on margin for their account through
the month just closed are likely TO draw
long faces when they receive their state
ments tomorrow morning. and find that
they have been charged interest at the
rate from l3 to IS per cent. The holder
Of stocks on margin hardly ever fully
estimates the effect on his account of
call money rates. and is apt TO grumbIe
when he finds that his interest rate for
the month amounts to a considerable
item.
Union Pacific was strong in London.
but the opening here not only failed 90
come up % the advance scored abroad.
but even fell below the previous nights
closing quotation. The early hesitation.
however. did net last long, and before the
end OF the first hour the price bounded up
to ll5 II. the highest point touched in
a week, and In advance of points from
Wednesdays lowest. There appeared to
be good deal of manipulation in the
movement. and if this was intended 70
force the covering Of shorts ii succeeded
TO very fair extent.
Some light was thrown upon the sources
Of the liquidation in New York Central
when certificates Of the stock or this
company appeared in the street, bearing
the name Of one of the most prominent
members Of the Standard or group OF
capitalists. The real significance Of the
appearance Of these certificates might
however. be entirely different from the
Interpretation given it by most of the
traders. The general situation was that
the stock certificates that were the sub
iect OF much attention had come out as
a result OF sales made in the last few
days. This might have been altogether
erroneous.
The usual custom when influential
liquidation is in progress is 10 borrow
stock for delivery. so that the real
source Of the selling may remain con-
cealed as long as reason for conceal
ment exists. or, in other words, until
the liquidation has been completed. That
such mas been the case in this instance
is indicated by the fact that the certh-
Gates showing where liquidation had
come from made their first appearance
when houses that had been lenders Of
New York Central had their stock re-
turned 10 them.
Renewed liquidation carried the price
of Pennsylvania down rapidly, causing
revival of the rumors OF a possible
reduction in the dividend Ii was re-
called that since the increase in the
rate was made a year ago. the company
has been obliged 10 meet heavy addi-
tiOnaI expenses on account of increased
wages and higher costs OF various kinds.
but it is doubtful If the selling really
had anything % do with such c0nsidera-
Ji0ns. Individual necessities more than
any other factor were responsible FOR
the selling.
A good part Of the liquidation came
from the South which has begun 90 ex-
perience the difficulty that New York has
long felt in carrying stocks ON margin.
Some brokers asserted that they could
See "a common origin for az least % part
of the selling of Pennsylvania and much
of tile liquidation iu New Yolk Central
in the needs Of some local parties. and
It Is by no means improbable that their
view was tolerably correct one.