The Washington herald., 1907-01-19
Pounding of Union Pacific
Feature on Exchange.
NEED FOR MONEY RUMORED
Some Brokers, However, Believe No
Financing viii BE Necessary to
SON and Chesapeake and Ohio Also
Talked About-Need Equipment.


or other obi-gE.icas, T. corr.ete ire pay
ment for the stocks If othe- roads ae-
quired since June 80, 1906. and which. ac-
cording TO the testimony of Comptroller
Mahl before the Interstate Commerce
Commission. amounted to $l03, 100000 par
value. The street roughly estimates the
actual cost Of these securities at some
ing like N50,O0OO0. and argued that it
would be necessary 10 raise anywhere
from $50090,090 to Sl00,OO9,G00 70 complete
the payment In some quarters there was
talk Of an issue Of short-term notes. and
in others Of sale of the 100000 900 pre-
ferred stock authorized "A few years ago
but never issued. In the best quarters
this story in its various forms is met
with the general statement that here is
no intention of raising any new C pital at
present
According tc p, sta ement mad r. 7Ir
Mahl the stocks acquired by the Union
Pacific and Oregon Short Line since the
beginning of the present fiscal year were
purchased without involving the necessity
of borrowing any money. which possibly
implied that the holdings of the Hill
stocks remained unsCId at the time of
making up the Union Pacific's annual re-
port have since been disposed OF. while
there is also the factor of the amount OF
money that was held by the Oregon Short
Line before the purchases were made.
Some brokers think il entirely possible
that no financing will be necessary on ac-
count of these operations at any tine,
and others are OF the opinion that The
terms OF purchase were such that he
company may be able TO await the arrival
of more favorable conditions in the money
market before making permanent ar
rangements. and in general, the belief-pre-
vailed that tha whole story was put out
by the bear party for the sake Of its in
evitable influence on the market.
Delaware and Hudson was another road
which was spoken Of as likely TO issue new
securities in the near future. the story in
regard 10 this property being that a sale
of 100000 Of stock was contemplated
This report was denied on good authority,
but il is doubtful II those who affected
So much concern about the alleged finan-
cial needs OF the property cared for "a
denial Their one concern was TO get the
market down. and the weapon which they
chose 20 accomplish this purpose was the
alleged necessity for heavy issues OF new
capitalization by the railroads. Den!als
which interfered with this purpose were
not welcome Delaware and Hudson is
doing well in the matter of earnings. and
the largest interests In the property think
as highly of il to-day as they ever did.
New York Central and Chesapeake and
Ohio did not escape attention from the
rumor monear-. he former tein~ sid TO
De in the market for loan Of 100000.
while in regard to the latter the story
was that a prom nent banking house had
already begun offering the notes for sub
scTiptiOn. but investors who made inquiry
on this point with a view 10 buying some
OF the notes found the report was at least
premature Many other stories Of sim
liar kind We're circulated and every
trader heard Of some road or other that
WAS knocking at the door of Wall street.
imploring for q loan, as II begging for
aims.
Perhaps a hitting climax to the cam
paign Of rumor regarding alleged railroad
borrowing was the story that 5000 had
been placed with one Of the loc-' banks
TO be paid as a reward to any one who
could name d single railroad anywhere 1
in the United States that would not be
under the nee, y Of raisins ne honey
this year. Needless TO say, the name of I.
the party making the offer Of the bank
where the money was alleged to have I
been deposited was not given
A number OF brokers who were i'm the 4
vestibule OF the exchange discussed the /
the last hour. and agreed that there was (
evidence Of aggressive operations for the I
decline, and that these seemed 10 be con
Quoted to a large extent by one OF the 4
most prominent groups of Western capi- I
-alists that have made New York the
scene Of their operations since they sold /
1ut their steel concerns at the time Of the .
Of the United States Steel Cor
poration.
The busy rumor mill did not confne it
self TO domestic material but turned out /
4 fabrication f alleg trou0le Ia Paris I
and elsewhere abroad. International
banking houses said there was absolutely
no foundation for any rumors of financial
rouhle in any Of the European capitals.
and pointed out that in the event of trou-
Die over there New York would get its
irst intimation from all-round weakness
n London, something that certainly was
Tot in evidence to-day.
When the rumor mill begins TO work
overtime the market as a general rule has
about reached the turning point This is
equally true whether the out-turn is of a
'ullish or Of bearish nature. The out
,ut has all been of one kind recently. and
10 fault can be found by the most ardent
'ear with the qGality or the quantity of
he product
One important point in connection with
he raising Of new capital by the railroads
S that the new money. except in one pos
ible instance, is not to be used fer the
purchase Of se-rs ties, but fcr in ,7s of
ABILITIES made necessary by the axtraor-
inary growth OF business the country
Yer. The railroads realize that they. can
ot supply their needs on favorable terms.
Ut they are deeply Impressed with the
pportunities 10 increase their business
y adding 20 their facilities TO an extent
hat will enable them to keep pace with
he growth Of traffic that, in fulaIlnent of
4
which they serve, they can
ee no other course open than to place .
themselves as soon as possible in a posi-
ion TO cope with the situation.
Upon my word, said an English visi-
or TO Wall street. you Americans are ]
paradox to ne. First YOU bril about
condition Of prosperity unparalleled in
he worlds history, and then, as if
larmed at your own success, you proceed
o destroy it. t0u may succeed IN Ihis
g you have in the other, but for the ad-
liration in which I hold you. | hope you
iii not 1t seems TO me that at present l