The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-03-05
WALL STREET NOTES
Northern Pacific Sells Down
to a New Low Record.
LOOK FOR LULL IN BUSINESS
Friends of James J. Hill Agree with
Him That Reduction in Railroad
Traffic Would Not BE Unmixed Evil,
Although q LesseninG OF Prosperity
Would Probably Follow.

New York, March 4-Northern Pacific /
was again one of the weakest stocks ON /
the list, selling down to-day to a new
low record since the practical dissolution /
of the Northern Securities Company. and |
the Hill stocks generally were the weak !
est feature of a weak market. Accom- /
panytng the decline in Great Northern
and Northern Pacific was rumor that
Union Pacific was marketing the re-
mainder of its stocks of these roads. but
such stories were doubted, In some good
quarters the belief being that the liquida-
ton for the account of Union Pacific had
ceased long ago.
II was pointed out that the reason given
for the sale of a part Of Union Pacidc's
holdings of the Hin stock last year was
that at the time the selling began these
stocks were on a basis where the yield
on the market price was only 31-2 per
cent, whereas other stocks, Baltimore and
Ohio and Illinois Central for instance.
could be bought TO yield ; per cent At
present prices Northern Pacific yields
more than per cent on its market price,
so that the reason FOR selling 1t that
operated last season has ceased 10 exist
Earnings Of Great Northern for the first
six months of the present fiscal year have
been nearly sufficient to provide the full
gears dividends on the stock, and il is
understood that Northern Pacific has
done about equally well. one of the
largest holders Of the two stocks speak
ing with special reference TO the latter
says that no stockholder who has paid for
his stock need feel the least worry over
the decline in the price. as the intrinsic
value remains unimpaired. and he viii
lose nothing in the long run.
Regarding what Mr.. Hill said a week
ago about the probability of contraction
in the general business of the country. the
impression in the minds OF many of his
intimate friends is that he thinks "a re-
duction in the volume of railroad traffic
would not be an unmixed evil since the
roads have more than they can econoni-
cally handle. and that so far as other
lines of industry are concerned, it is Well
TO anticipate "a IessenIng Of the prosperity.
so that when it comes all may be pre-
pared 10 meet il. His view. according to
reports coming from people who have
conversed with him, is that If there is
general expectation of a serious reactionI
in business none may occur, although he
does not see at this moment how some
falling of in the general activity can be
prevented, as there Is nothing I'm sight 10
fill up the void that must be caused by
the completion OF the railroad improve
mcnJs that viii be finished up this year
and the suspension of work on others not
imperatveiy needed.
The heavy selling Of the Hin stocks be
gan with Western houses. but IL was
thought that what was handled through
these channels represented the manipula-
ton designed to weaken the position Of
speculative holders and force liquidation
That there was liquidation and plenty Of
it. could not be denied, but much of the
selling that forced prices down was exc
cUted 10 accomplish that very purpose.
and 10 have come a bear pool that has
been operating in the market since the
end Of last year. and has made a great
deal of money and derived a great deal
Of courage from the success Of its opera
tions. There was talk of cunning for
particular holders of the stocks, and intj-
nations that such "a decline as these is
sues have suffered in the past few months
must have meant something like ruin to
not "a few spectators did not fail on deaf
ears, and the trading element showed
disposition to hasten the climax
On one point there was unanimity Of
opinion last week that II the market did
not rally on the passage of the Aldrich
bill and the adjournment of. Congress,
there was nothing that could prevent it
from going down until prices had reached
a level where they would strongly appeal
TO the investor on account Of their diyi-
dend yield. On the break yesterday. after
some conservative brokers thought that
the level had been reached by a good
many issues. they advised their Gus
toners who could afford to buy for in
vestment that il might De well to begin
accommodating on a scale down. The num-
Der OF good stocks that could be bought
TO yield . per cent, or about the time
money rate, was quite large; and In view
OF the prospect for heavy business for
months to come. tho security Of present
returns WAS regarded as sufficiently estab-
iished to appeal TO the bargain hunter
who has not seen so favorable an op-
pOrtunity to invest in securities in many
day.
The dealings In Reading were conducted
on an enormous scale. and while the bears
TeipuueSsly hammered the stock. they
were unable to drive its price down to the
level touched in the break last week
The resistance shown by this issue was
one Of the bright spots in the market and
the impression created was that the ap-
pearance of good buying noted in the
past few days was not illusOry.
That the anthracite coal trade is now in
excellent shape there can be no question
the supply Of coal in the hands of dealers
being smaller than at the corresponding
time in any recent year, not even except
ing the close OF the winter following the
great strike that tied up mining opera
tons from May to October a few years
ago. Those who are most bullish on the
stock admit that the yield on the price is
very small, but contend that the earnings
are out of all proportion to the dividend
rate, and that if present anticipatiOns in
regard 10 business are sustained the man
ageucnt will have 10 excuse for with
holding from stockholders a larger per
centagc of the profits Of their company.
one of the large traders started the
selling of marlborough Metropolitan. but
nothing was heard in explanation of the
decline beyond the reiteration of the
rumor circulated on Saturday to the effect
that the dividend on the preferred stock
would be reduced or passed altogei her
The decline caused considerable llquida-
ton. although SOME close observers said
there was at least an equal amount of
short selling. if indeed, the latter did not
nrodnmlnllc Derhnns the mn.t ancnl1r-