The Washington herald., 1907-05-09
WALL STREET NOTES
New York Central's Weak
ness Causes Gossip.
EXPLANATION NOT SATISFYING
May BE Meant as Object Lesson TO
state LegisIature-Raise in Wages
Responsible for Poor Showing In
Quarterly Statement-CritIcism of
Increased dividend Rates Made.

New York. May S-New York Central
was again to-day the most discouraging
feature of the market from the bull stand
point. There was still some appearance
of liquidation ~ least during the fore
noon to come fr,m the covering Of shorts
Nothing in the ay Of bearish rumor was
added 10 what had been heard previously.
This was perhaps the worst feature Of
the decline because It showed that the
selling did not proceed from any tenn
porary uneasiness but from established
conviction or possibility from the neces-
stiles of individuals the extent of which
could not be determined.
Discussion of the statement for the
March 81 quarter, and the bearing of the
results shown on the prospect for the
continuance Of the present dividend rate
continued, and while there was an in
creased disposition 10 ascribe the poor
showing in net TO the inclusion in Operat-
ing expenses of large amount of money
used for the betterments some advocates
OF this theory were inclined to admit the
possibility that the management had
thought it well to prepare the public for
a more conservative policy In the mat
ter of disbursements than the one adopted
before The effect of increased wages had
begun 10 make itself felt or the hostile
measures brought up al the present ses-
sion Of the legislature had been heard Of
In a few places the fact that the show
ing was so bad aroused a suspicion that
it was intended as an object lesson 20 the
legislature. but whse there were ali kinds
OF theories no satisfactory explanation
came from any quarter, and the state
ment remained as it had been issued on
Friday, but with its seriousness accentu-
ated by the weakness which It had pro-
duced in the stock.
Hardly any doubt can exist that the
supply Of New York Central stock in the
street Is much larger than usual. Whence
the increase has come is as much mystery
as the reason for the selling that brought
il about Some large line has been hqui-
dated, and If the reason for this Iiquida-
ton was known the reason for the heayi-
ness in the stock might become abundant
ly clear, or'i might be made plain that
the break had nothing to do with the real
val.e Of the stock, and that price recoy-
cry vas in order.
a few weeks ago the announcement was
made that the April dividend was paid
10 about 900 more stockholders than the
one distributed three months earlier.
Looked at in one way this indicated that
the March decline a considerable invest
ment demand was met with, but from
another point OF view, and the one the
street is inclined TO consider most i'm
portant now. il showed the distribution of
some large holdings, possibly because of
a change in the aspect OF the company 5
fortunes. OF of circumstances that COM
PEELED individuals 10 relax their hold after
it had for years contributed TO sustain
the reputation of New York Central as
one Of the most closely held stocks on
the stock exchange list.
Publication Of the gross earnings for
the month of April was followed by an in
crease Of the covering movement in New
York Central. and what perhaps helped
even more 10 rally the stock. was a rumOr
that the explanation Of the increase in
operating expenses for the past quarter
had 10 be sought as much in the inclusion
Of claims arising out Of the Bronx accI-
dent as In the increase Of cost Of labor.
For the time being. al least. the stock
seems 10 have become OVeTsOld. and the
rally had something Of vigor about f.
Almost everywhere It was conceded that
considering the decline in Delaware and
Hudson from its price of a few days ago,
Reading had acquitted itself very wei.
1t showed strong undertone to-day. al
though all that came out in the way Of
news was the official statement of the
anthracite production for April, as had
been anticipated, was phenomenally large.
That the buying had any more signif-
canoe than what was seen in the majority
of other stocks, no one contended. 1t
was of the merest professional kind, as
was the selling also. and while at one
time there was q rumOr that Mr.. Frick
had recently been buyer on a consider
able scale, there was absolutely no evi-
dence of anything Of more consequence
than the rather desultory operations of
the room traders seeking 70 scalp profits
at the expense Of one another.
A line of argument that has become
popular with the bears is that some of
the large railroads which increased their
dividends in the latter half of 1897 did Sc
on the ground that the preceding year
had been one of unusual prosperity, and
that in fairness 10 stockholders some
thing beyond the usual rate of distribu-
tion should be made. This sort of argu-
ment is very mischievous, as il is prob
ably meant 10 be. II the directors Of any
Of the large roads felt that the cOndi-
tions on which they based an increased
disbursement for the year were not Of a
permanent character. they would have
declared an extra dividend instead OF
increasing the regular rate. That would
have put their action beyond the possibil-
ity Of criticism What was done was
done in good faith, and If matters have
since taken such shape that the conun-
uance of the rates adopted is not now as
certain as at first il seemed to be- that is
not the fault of the railroad managers
Increased wages, reduction of passenger
rates, threats to reduce freight rates. leg
islative hostility in a multiplicity OF
forms have now to be Teckoned with as
not before, and every investor recognizes
the fact, even if Wall street spectators
try to force it into the background.
What the traders were pleased to call
liquidation for the account of a capitalist
largely interested in steamboat properties
was pointed out in Delaware and Hudson.
The selling was there but that it reflected
liquidation by a steamboat interest. OF
by any other interest. was the merest
guess work. If there were liquidation OF
a large account it was strange that the
shorts had found the stock in small sup
ply when they tried to cover, and in small