The Washington herald., 1907-05-17
WALL STREET NOTES
Lead Common Dividend In
creased to Five Per Cent.
BUYING OF READING IS GOOD
Road DevOtes Millions to Improve
ments and This Is Believed to
Prove Room-Union Pacific SynCi-
cate Being Aided by brokerage
Houses-Rumers About Smelling.

New York, May 16.-As has been gen
orally expected the directors Of the Ma
tional Lead Company voted to increase
the dividend rate upon the common
shares. In one respect their action fen
short Of the expectations entertained in
speculative quarters, where It had been
expected that the rate would be raised
To per cent. Notwithstanding that we'll
informed interests gave no encourage
ment TO such anticipations.
A . per cent was what those who know
most about the COmpany's affairs had
promised. and per cent 1t proved TO
be. Perhaps the exaggerated ideals Of
official liberality entertained before the
announcement Of the dividend we're de-
rived from the advance in the stock, for
which il was supposed justification woulG
be found in the action taken OH the divi-
dcnd question.
Nothing less than 6 per cent rate, 1t
was argued, would justify price OF
nearly 20 for the stock. This was rea-
sonable conclusion. but it only proved
that the price was too high, and those
who had bought in the expectation Of an
Increase to 6 per cent were genuinely
disappointed when they found that they
had been deceiying themselves.
Naturally when the Lead dividend was
announced the traders drew comparisons
between this stock and others i'm a way
which made Il loom relatively dear at
prevailing prices. Few Of the profess
sional element could see, for instance,
why Lead a per cent stock, should sell
about points higher than American Lo-
comotive, another 8 per cent stock. os-
pccially as the latter seemed 10 have the
larger margin of safety for It's dividends.
Possibly there was some factor such as
the alleged need Of the Locomotive com-
pany for additional working capital, 10
partly explain the discrepancy IN price,
but the traders did not care % go into
any analytical studies 20 ascertain the
relative merits of the two stocks, salts
fyi1g themselves with the fact that before
the advance In the Lead dividends
brought this issue into new class, its
price had already discounted the change.
Viewed as many brokers viewed il, as
an attempt 10 swing a large dog 10y the
tail. the movement in Lead was not con-
spicuGus success. Lead, II was supposed
was the means % an end and that end
was 10 start a move I'm American Smell-
ing and Refining that would revive inter
est in the bswhiskered and grizzly rumors
about the alleged purpose ~ the directors
of this company 90 place its common
stock on a 10 per cent basis. But when
o tail was frrkcd it came away and the
body remained practically fixed and i'm
movable. the public apparently caring rs
little about It's position as about that OF
every otner stock on The list. which
meant that they were wholly uucon-
cerned about its fate. Il was simply q
/ case Of apathy all round
Buylug Of "a better quality than any
that had been seen in the stock for SOW
eraI days preceding was noted in Read
ing during the forenoon. bat was not
accompanied by any rum0r worthy Of at
tention. II was apparently accumulation
conducted in a quiet way and with no
present desire 20 advance the price The
stock did not appear 20 be In plentiful
supply. but while on the other hand there
was talk Of a large short interest. some
sirewd operators expressed the opinion
/ that this might not be as large as was
commonly supposed.
on the subject Of financing, the street
/ has about made up its mind that whilc
/ the company does not intend TO call for
new capital i'm the near future. the track
elevation project I'm Philadelphia and
+ other Improvement work viii sooner on
/ later make il necessary % raise addi-
tional capital but that Reading can az
/ ford 90 wait until conditions in the money
market are propiuous for the obtaining
4 Of funds ON reasonable terms.
/ The company has, Of course. in the
past few years earned a great deal of
/ money in excess Of what it has paid ont
! in dividends. but the greater part Cf this
/ has been used up for Improvement Of the
property In ways that might rightly have
/ been made the subjects Of new capital
! charges. Readings last annual report
| showed that in the year ended June 80
/ ls4. the company charged 10 expenses
/ the sum Of $3539,352 used for improve
me IS on the property. That purchase
/ Of real estate would be a proper capita
/ charge nobody will deny and yet this is
/ tho first item on the list Of improvement;
/ charged 10 expenses, and the other,
/ might just as properly have been made
4 the basis Of new capitalization had the
/ management first thought it best TO adopt
a course that cannot be described other
/ wise than as extremely conservative
nere was plenty Of bull talk on Unior
acifC. but not q single new argument on
4 the stock Nothing whatever was said L
relieve the monotony of the arguments
that the underwriting syndicate would
must Of necessity. even-give strong sup.
/ port to the stock by way Of encouraging
the stockholders to subscribe for the
bonds. That this would be done was as
serted everywhere, practically proclaimed
from the house tops.
Wire houses sent It over their wires &
other cities. and brokers who make Z
practice of writing daily market letter!
made prominent mention OF IL, while Z,
all inquiries as to the best stock to bur
the answer was, Union Pacific, and tn,
reason given was always the same I
the technical position of the stock is {,
be a factor in the manipulation It wa.
just as likely to be available for a shake
out If the bull account becomes overex
tended. as it is now availod Of to keep tn,
shorts in a state Of nervousness.
While. of course, brokerage houses tina