The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-05-03
FINANCIAL AND COMMERCIAL.
THuRapAY, May 3

Although news from the winter wheat
section to-day was again Of a somewhat
d~tscouraging character and in the stock
market itself an entirely dhproportionate
quantity Of the total dealings were in Union
Pacific common stock the market was still
generally broad and strong and net gains
Of q point or moro we're established In most
Of the leading shares. Union Pacific stock
rose nearly 4 points. In the fore part Of
the day the market was inclined TO sag a
little, but quotations Of stocks were still
almost uniformly held above those last
made yesterday; and while from time to
time during the day the market paused,
and even receded somewhat. the impulse
behind a general upward movement was
unmistakable and the nervousness Of the
large short interest still in existence In the
market was plainly increased. Speculative
sentiment was undoubtedly greatly Inn
pressed with the sustained rise in Union
Pacific. Up to the present time Wall Street
has been more or less sceptical about the
advance in this quarter and has been in
clined TO attribute the movement TO the
work OF a pool in the stock formed by large
spectators that presumably based It's
operations upon the liquidated condition
Of the market. the particularly low price
OF Union Pacific common stock az that Of
a ten per cent. dividend paying security
n the renewal Of confidence that this
dividend rate would be maintained in view
OF the large earnings constantly reported
by the company. Opinion veered to-day
TO the conclusion that such a great volume
Of buying in the stock could not proceed
from any but the large financial interests
and that 1t portended some distinct finan-
cisl operation connected with the Union
Paciic's affairs. Gossip busted itself
especially with the oft repeated story
that the formation Of a holding oom-
pany or other similar corporation was
meditated for the purpose Of taking over
the ownership Of the Union Pacifio's interest
in the Southern Pacific and many other
stocks; that is to say. in substance. Of a
proposed distribution Of the Union Pacihc's
investment assets among it's stockholders;
and great interest was therefore excited
by an extreme rise to-day OF over 8 points
in the Union Pacific preferred stock, which
TO a certain extent was taken as confirming
the variability Of the tale. It has been
frequently pointed out in this column that
in any such distribution Of assets as has been
outlined Union Pacific preferred stock
must necessarily share as q recipient in the
same pr~oportionate degree as the COM
pany's common stock. There are SUBJ,
stantiai reasons for the belief that the hold
ings Of Union Pacific preferred have become
in the course Of years lodged in bulk In the
possession Of those very close TO the man
agement OF the company, and the violent
rise in the preferred stock to-day was &C.
complished through purchases Of only 1900
shares Of the issue. On the other hand,
there were many observers who regarded
the movement in the preferred stock with
considerable suspicion and who maintained
that it was a mere manipulative trick de-
signed to foster the seeming truthfulness
Of the holding company idea, and it must
be said that IL the day Of the formation Of
such a holding corporation is really near
at hand it would seem almost inevitable that
the price Of Union Pacific preferred stock
would long since have moved to a much
higher range than that which it now occu-
pies. There was much talk to-day OF q pos
sible retirement Of Union Pacific preferred
stock, but neither the charter nor the by
laws Of the Union Pacific Company contain
any provision for the retirement Of the
stock and neither. 30 far as can be learned,
can such action take place under the laws
Of Utah, in which State the Union Pacific
Railroad Company was organized.
There were. however. many other ele-
ments OF strength In the market to-day
aside from the yours OF the Union Pacific
securities. Wall Streets deliberate second
concerning the Atchison Railways |
new convertible S per cent. bond issue, |
announced yesterday. was much more
to the proposition than 1t was at
first. and indeed to-day the opinion be-
came general that the plan represented |
the best n soundest financing scheme |
hat has been proposed In the financial
for a long time. The Atohison |
company recognizes the increased worth |
of money that has come sbout by Offering I
! 5 per sent. bond running for a limited
period OF time and which appeals also TO the
,emi-speculative hopes attaching in greater
Or less degree TO every investment by the
grant Of a call on Atchison common stock
or seven years from date. II a larger
number Of railroad companies In the recent
past had framed their money raising plans
n a similar way. that Is to say, had offered
or sale a straight bond bearing a high
out not extortionate rate Of interest in
Jtead Of attempting to negotiate so-called
term notes at an interest rate that
directly upon the credit Of the
borrowing company, less would probably
ave been heard OF the inability Of railway
organizations to obtain funds for improve
nent work. 1t Is to be noted in the case
u the Atchison that in spite Of a common
Impression that the company has greatly
increased its capitalization in recent years,
he company has in fact from the year
800 TO 1905 inclusive increased its fixed
by less than 100000. while Its
let earnings have increased in the period
$50, 900. A distinctly helpful market
influence to-day was also the many favor
Lble criticisms heard upon the report VI
he United States Steel Corporation pub
ished Tuesday afternoon, but not atten-
lively studied until later. The financial
Of the Steel Corporation Is dis
as fortified and bulwarked In the
possible manner. while the put
ook for the corporations business appears
o be Of the nos rosy description possible.
indeed. In the iron and steel as well as oop-
yer trade all signs indicate that the gloomy
predictions OF a contraction In business
which Wall Street has been filed for
month past are quite without foundation,