Evening star., 1907-05-26
WIDE PRICE CONCESSIONS
Liquidation Charged to Individual
Necessities.
HEAVY SELLING OF U. S. STEEL
Powerful Sentimental Effect In Dc
pressing Entire
s.,
80 List. i!

NEW YORK, May 25.-The short session
Of the stock exchange today was practi-
cally barren of interest. Dealings were
small and price movements sluggish and
hestating The undertone was weak and
tentative efforts by room traders to carry
prices upward were soon abandoned. A
bad impression was made by the report
that the underwriting of the $10.oOO,OoO OF
Rock Island A per cent refunding BONDS
had been at as low a figure as S2, the
length of time which the bond has to run
to maturity indicating that little hope Is
entertained of an early relaxation Of the
strain on capital The banks made a strong
showing in the weekly statement. the cash
increase being much larger than was esti-
mated This did not help stocks, and low
est prices were made after the appearance
of the statement Foreign exchange con-
tinued firm, and there is growing hkeli-
hood again that gold will go out. Discounts
in London rose further and sharp compe-
tition is expected with Paris for the weekly
arrivals of gold in the London market on
Monday. There was continued liquidation
in the Southern Railway stocks. which
forced the preferred to the lowest level of
the year. The heavy tone of United States
Steel was of marked sentimental effect on
the whole market The closing was weak
at the lowest prices. Total sales of bonds,
par value. S760.O0O.
Stocks have been for sale in large vol
ume this week, and with the continued tor
pidity of the demand wide price conces-
sions were made necessary to secure
market. The activities of an organized
have been clearly evident, but liquidation
In large volume has given success to the
operations of the bears. The sources and
the motives of this liquidation have fur
nished the material for the principal dis
cussion during the week.
There has been no special new develop
ment to account for 1t, although the gen.
eral conditions have been a continuing dis
couragement- to any effective demand for
securities and this has operated with cumu-
lative force In prompting holders to get
out of their position In the market.
Reasons for Heavy Liquidation.
Important liquidation has been attributed
to individual necessities and plans on the
part of capitalists of high standing, and
this has furnished fruitful field for
rumor and surmise, which is given credit
by its plausibility.
Heavy selling of United States Steel has
had a powerful sentimental effect In de-
pressing the whole list. and rumors point
ing to individuals were busiest concerning
this stock. The notoriety given to large
personal loan negotiated by a capitalist
prominent In the steel industry and in
mining ventures directed conjecture to that
SupPoScu ooufCc. HC PioeSSS VI oiSSOaotioA
of a stock exchange firm which has been
very prominent in speculative operations
for long time past gave another direc-
tion to the discussion on the subject. Cir
cumstantial reports were published also OF
liquidation in the same stock. prompted
by a rumored coming official change in the
corporation.
There were suppositions that other large
capitalists were seeking resources through
stock market liquidation to meet obligations
on syndicate subscriptions and to pay for
new issues OF securities offered as rights
on existing holdings Of stock. There can
ture constitute a very general cause of the
present restricted demand for securities In
the open market.
Stock Offers at Par.
Offers of stock at par to stockholders in
large amounts, or Of convertible bonds at
attractive figures, have been made by
number of the companies whose stocks are
most carefully guarded, usually, against
aggressive attack in the market At pres
ent. however. stockholders are involved in
obligations for periodical installments of
subscriptions to these large new issues,
which preclude them from giving the usual
support to their stocks in the open market.
1t was a common supposition that Union
Pacific was under pressure during the week
to provide resources for the convertible
bond underwriting.
This is only one phase of the presen'
scarcity of liquid capital which lies at tns
root of the present prostration of demand
for existing securities not only in this
country. but in London and in continental
money centerS. New issues in London
are followed by liquidation of the cid. Re-
ports from Berlin tht week alleged the
dissolution of a German and Prussian bond
underwriting syndicate with a large pro-
portion of the bonds left on hand. Railroad
corporations in this country are in grave
need of capital and successive note issues
to bear a high return continue to reflect
their urgent necessities and the sacrifices
they are compelled to make to meet them.
Demands for Capital.
1t is this well recognized condition which
makes any present ease in money markets
seem fallacious and only temporary. Large
resources are kept in hand or in position to
be readily recalled in the constant antici-
patton of these new demands for capital.
The comparative ease for call loans Is thus
accounted for and by the scanty demand
for stock market speculation. Financial
sentiment Is especially sensitive to all
factors affecting the credit of corporations
which are making these large demands for
new capital. Government activities to ex-
tend regulation and control of corporations
are standing influence in the securities
markets.
The publication OF the report of the bu-
reau of corporations on the Standard Oil
Company and the intimation of an early
resumption of the Interstate commerce
commissions inquiry into the common re-
lations of the Northern Pacific and the
Great Northern to the Burlington were of
immediate effect on stocks early in the
week. On the same topic attentive con-
slderation was given to the finding of a
referee against the validity of the New
York law fixing rates for gas in New York
city at - cents. The grounds of this tind-
ing especially the stress laid on the rom
hscatory nature of legislation which fails
to allow a fair return on invested capi;.I
were accepted as offering important prin-
clples for the restriction of the scope of
legislation. especially in view of the pre-
Nalling agitation In favor of fixing of rail-
road rates by law. This incident. while of
no immediate effect on stocks. was widely
discussed throughout the financial district
The progress of the crops Is diligently
scanned by stock market interests, but the
market has not been so Immediately re-
sponsive TO movements in the price of
wheat owing to the suspicion of purely
speculative origin for a large part of the
activities in the wheat markets. Exports
OF gold to France We're a possible con-
urgency early In the week. but the decline
In foreign exchange during the week post