The Washington herald., 1908-02-18
WALL STREET NOTES
Fear of Lawsuits Causes Sell
ing i'll Union Pacific.
BOND ISSUE EXPECTED SOON
Traders Regard Recent Dividend the
Last One AT Prevailing Rate-Quo-
sale Of Paper Il Denied-PennsyI-
VRnia Attacked by Bears.

New York, Feb. 1i-"Never buy into
a law suit Hardly any precept of Wall
street is more strictly observed than this.
II was observed to-day. and So. too. was
the other and for tile moment more i'm
portant one which warned those who had
already taken a speculative position. not
anticipating hostile litigation. to get out
when that factor entered
Hence there were few buyers and many
sellers in Union Pacific. There were suits
against the company itself. and against
its subordinates. and nobody could tell
when others might DC brought or how
those already entered might end.
Those who were on the outside did not.
as a rule, feel enough concerned 10 study
the matter very deeply. and those who
were on the inside were too much. scared
10 take a calm view OF the situation
The stock has always been "a favoritc
with spectators, and there was quite a
little of it in weak hands. and wne4
these began to let so the Inevitable hap,
pened-the supply being greatly IN ex-
cess Of the demand. the price declined
sharply, and stayed down.
Union Pacific Will sell ex-dividend on
FEBRUARY IS. The present price there
fore. represents $3.50 a share for the divi-
dend and the balance as the net value ~
the stock In this sense to-days low
point Gf HIS meant a price OF 1095, for the
stock eX-dlvidend The bulls said a quo
tation under 10 would look low.
The traders regarded # as a forcgonc
conclusion that the dividend recently de-
clared on Union Pacific would De- tho
last at the prevailing rate. When the
company first began TO make disburse-
ments Of 10 per cent 2 year, Il differ
entiated between disbursements from the
earnings 81 It's own lines and those made
from returns on its investments. II paid
8 per cent from the former and per cent
from the latter source.
I'm Hartman quarters. Il was said that
something of a nature very disconcert-
ing TO the bears would happen within the
next few days I'm other quarters. fl was
said Union Pacih" would announce a new
SS5.#"W1 bond issue i'm the near fu-
ture A well-ltnowu bear trader who
heard Of the bond issue said he knew
IL. would have 10 come m time, but that
u could not come now. "hccausc there is
no market FOR such bonds as the COM
pany will have 20 offer"
This seemed 10 be the prevailing Opin-
ion. but the fact that it was so only
served AS reminder that Wal street
soon forgets. There is no market in
which railroad could sell collateral trust
bonds. debeHtUrcs. COuvertbles. or stocks
To advantage. but first mortgages couId
probably be disposed Of on reasonably
good terms. The supply of these is linn
tied. while the demand for them. bankers
say, would suffice TO absorb large
quantity.
Some Of the foreign houses had RI
NOR that Union Pac6c had already sold
So. 0oo.Oe0 or Si0clO010 bonds in Paris. but
in the bcst-informed circles il was de-
MED that any sale bad been negotiated
and the statement was made that while
Union Pacific would DO some financing
when the psychological moment arrived
any discussion Of the subject az the pres
ent time was premature.
On no stock was there more bear talk
than on Pennsylvania. yet nowhere IN
the railroad list was greater Grmness
shown. The rumors concerned The al
legged need Of new financing and the pos
sibility Of reduction in The dividend
and II they lacked originality they stiU
found many traders who We're willing 10
repeat them with increasing emphasis
that in some measure. seemed 10 atone
for their want Of novelty.