The Washington herald., 1907-05-20
MARKET IS INACTIVE
Presents a Sold Out, Cleaned
Up, Fortified Condition.
INTEREST IN HARTMAN LOAN
Purpose of Big Borrow Is to Pay
for Stocks In other Lines Bought
by Union and Southern Pacific.
Interest Now Centers In Price of
Wheat-Much Depends on Weather.

Wheat-Much Depends on Weather.
New York. May Exchanges In prices
of stocks during the week, unless the
word is a misnomer as applied 20 such
slight fluctuations in the market as ac-
tually occurred. were in the main in the
direction Of a lower level, and the dullness
of the market almost continually in
creased throughout the period.
An exceedingly small proportion OF
stock exchange business is due at present
to the operations OF the general public.
and the great majority of professional
traders in stocks seem to have arrived at
the conclusion that the security market
is for the time being I'm a rut, from which
any efforts on their part 10 lift It are
likely only 10 result IN a profitless pay
Ing Of interest and commission charges to
brokers. Such recession in prices as was
witnessed was therefore Of no other sort
than a mere sagging of a torpid market
under its own weight and ran at no
time 10 greater length than could be made
good in a few minutes active trading
II is now apparent that our market IS
beginning TO feel, for one thing, the alb
sence from the scene Of action or the
presence there only in a limited degree
Of the stimulus afforded up 10 within a
short time ago by the speculative buying
and selling OF stocks by a large number
~ rich a,d rov.arfYll traders
Market I'm state of Inertia.
What IS also the case at the moment
IS, Of course that the stock market Is
Just now in a state OF equilibrium. II is
a market concerning which a good deal
can be said on both sides Important de-
velopments in II have not been lacking;
and IL must be admitted that during the
last few weeks these developments have
most Of them been OF an unfavOrable sort
The outlook for the crops is at best du-
blous. The profits of the railroads and Of
business enterprises generally are show
ing a tendency TO decrease under high
operating expenses. principally those aris-
ing from inefficient and costly labor.
There IS little investment demand for
stocks and bonds. the year Of the Presi-
Dental contest with all its contingencies
each day grows nearer. and there are
indications that money rates are likely
70 advance.
II cannot be doubted that these forces
would have resulted under ordinary con-
dltlons in declines IN market prices much
more serious than have lately been wit
messed. but the fact is. on the other hand.
that the stock market Is largely I'm the
state known in Wall street as sold out
Il is a market that has already 10 con-
siderable extent passed through the FIRE.
Accounts open for the rise In stock COM
mission houses have been reduced or
closed altogether and Wall street is gener-
ally In q comparatively purged and forti-
fed state Hence there is little OF no
Iiquidati0n of securities when either bear
pressure is exerted against them or un-
mistakably bad news in market sense
is announced.
Purpose of Union Pacific Loan.
II did not take Wall street long last
week 20 arrive at a fair understanding
Of the latest Union Pacifc-Southern Pa
cifc money raising plan. which, aside
from the advance IN wheat prices, has
been the most talked-of matter in finan-
cial circles during the last fortnight.
There were obviously two aspects Of the
affair. one concerning the merits and
feasibility Of the financial plan itself and
the other the character OF these neces-
stiles on the part Of the Hartman man
agement that made the borrowing Of
money inevitable. The conclusion became
general in the financial district that the
money borrowing plan itself. as being
that Of a resolutely high bid for money
was likely to be successful, especially
when II became known that the new
Union Pacific convertible bonds were COM
paratiyely long lived and were underwrit-
ten by a syndicate at price that insured
large subscription to the bonds by the
members Of the syndicate themselves; al
though this favorable view Of the case
was a little modified toward the close of
the week, when the bond market as a
whole became depressed.
But as regards the purpose for which
this money was TO be expended there was
no departure whatever from the strong
and insistent condemnation visited upon
the matter both by people at large and by
those in conservative banking circles. No
Juggling or equivocation Of language, 30
puing up Of figures to represent the earn
ings and undivided assets" Of the Union
Pacific Company. nor any other means
can conceal the fact that at a time when
] -
road company in the land is for money
TO spend upon so improving its facilities
that the business OF the country can be
properly handled the Union Pacific man
/ agement is borrowing funds IN hundred
million dollar blocks for the purpose OF
purchasing the stocks of other and rela-
/ lively remote railway companies for tho
| seeming purpose only Of either dominant
/ speculation or for monop0lizing traffic
/ facilities.
| Wheat Crop rs Market Factor.
It seemed TO most Of those who gave
/ the matter dispassionate attention last
week as If the crop situation. so far as II
was affected by climatic influences, was
/ better than It was in the week preceding
/ The forecast just now is, in other words,
I IvI gen Adl NLceil Iiup tLl4S Ntdi ltHs
/ by at least a hundred million bushels
| than last year. and this leaves two in
| teresting questions to be decided concern
/ ing the bearing of the agricultural situa-
tion upon the country's general prosper
/ ity VIII there be a surplus quantity of
wheat large enough TO supply the export
demand for the article. and will the peO-
/ pie of the country as a whole, gain OF
/ lose by the sustained advance in the
/ price of wheat that will follow as the
result of a crop deficiency? Another fac
/ tor of immense weight in the problem is,
Of course, the falling off in the foreign
| wheat crops that is indicated. no less
/ than the curtailment of the crop here
/ This is a matter upon which there is q
! call for a little closer reasoning than
! Man street often cares 10 indulga in II