Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-03-22
Financial News Letter
BY ". o. NICHOLAS.
Special Correspondence of The Star.

ne manipulated ADVANCE In the STOCK
market came to a climax early in the
week. The market leaders quit; bullins
when they discovered that they were get
ting more stocks than they would sell.
The movement was engineered for the
purpose of distributing an accumulation
of securities. and the understanding is
that the insiders succeeded in unloading
upon the public big lot of stuff. Several
factions or interests were working in
harmony for the rise, including such
ordinarily hostile elements as Morgan,
Hartman, kuhn-Loeb and Standard Cl.
Mr.. Hartman was especially active, he
having commenced the deal by heavy pur-
chases of calls on Union Pacific and
Reading in London. This is an old trick
of his. The London sellers of calls make
a practice Of buying one-third to one
half as much stock as they sell calls on
and so become an active agent in the
market. Mr. Hartman is said on this
occasion to have bought about 10000
calls on Union Pacific, and the Londoners
bought in the New York market between
$4,000 and 5000 shares on the New York
Stock Exchange. This gave the market
a good start-off. and it was followed by
In this game Mr.. Hartman and his
friend, H. c. Prick. showed something
of their old form. Incidentally also Mr..
Morgan's interests for the moment lay
for higher prices. He and his powerful
following did heroic work for the rise,
paying special attention to the steel is
sues and New York Central. Pennsyl-
van'a also shared in the upward move
ont ;,,l -x~;.I /. ~,,$v,o x,,f
Amalgamated Copper and American
Shelters took the lead, Republic Steel
and Iron was also moved up about 10
points, John W. Gates taking a hand in
this play. although he was not personally
on the ground to take charge of the
interested in Republic Steel and Iron. and
appears to be a great believer in the
property, although it is not giving a
very good account of itself these hard
tai and most of its output is strictly COM
petitive. 1t is in direct and strong COM
petition with the steel trust and other
large manufacturers.
The company strained itself in paying
off accumulated arrearages in preferred
continuance of dividends on the pre-
ferred stock is not considered very bright,
and times will have to improve decidedly
before the corporation can be considered
Iii ui6t-CldSS SHAPE
Railroads are doing a little better in
their net earnings. This Is not because
OF any appreciate increase in business,
but because they are cutting and prun-
ing and pairing wherever they can in
expenses of operation. It takes long
while for railroads to get down to i'm
portant economizing. AS a rule their
contracts which call for the expenditure
of money are for long time ahead. In
normal times they renew contracts for
material and supplies. In these times.
however, they are not renewed and roads
are adopting the policy OF buying from
hand to mouth. and only as requirements
demand. They are not committing them
selves any more than they are absolutely
obliged to. 1t was some time before the
knife could be applied hard enough to
make the effect visible in the financial re-
ports. Now, however. the work can be
seen, and as before stated percentage OF
net revenues shows up better.
Apparently railroads are putting them
selves in shape for a long seige of hard
times and bad business. So long as their
cas- are idle In great numbers they are
not deceived by talk of reviving business
and restored prosperity. It is all right
for preachers of the gospel OF hope to
talk about revivfng activity, but the facts
as reflected in the volume OF traffic on
railroads do not prove out. Brave words
as far as they go. but they do not really
bring the business and are not accorded
as much weight as the statesmen would
like to have 1t. 1t is not always possible
to bring an era of good times by White
House proclamations or congressional en-
actment.
Idle capital Is piling up in the money
centers and solvent borrowers are in de-
mand Railroads and industrials are be-
ing Disseminated against in most mark
ed degree They are still obliged to pay
6 or Z. per cent, plus commissions, for
whatever money they must have. and
lenders are none too anxious to supply
funds even at these rates. Corporations
are under the harrow. and the effect OF
political disfavor is seen in the interest
rate which owners of money are exact
ing This matter has been discussed in
these letters several times, and 1t may be
referred to many more times. as 1t is a
distinguishing feature Of the financial
situation.
A stop has been put to railroad extern
sion. except where plans were too far adj
vanced to be abandoned. st. Paul is
notable case of work commenced which
must be carried through. It is commit
ted to the construction of a line to the
Pacific coast and is putting 1t through
with a reasonable speed. The Pennsyl-
vania, New York Central and New Haven
roads are compelled to go on with their
terminal improvements in and around
New York at a cost of not less than
$500 OOO. 900 all told They would. no
doubt, be glad to quit but are driven by
stern necessity to finish the improve
ments under way. The only chance they
have for getting returns on the money in
vested is to go ahead. Railroads are or
dering almost no new equipment, and as
long as they have hundreds of thousands
of idle cars and ten of thousands of idle
locomotives there is no need for them to
think of replenishing rolling stock.
The reduction in New York Central divi
dend struck chill to the very marrow
of the bull contingent. The last official
statement of the Baltimore and Ohio
helped to still further lower the tempera-
ture The street construed the exhibit
as foreshadowing a reduction of divi-
bends in that quarter Also and incfden-
tally directed attention to Pennsylvania
and Union Pacific. 1t was noted that po-
litical announcement of improving bust
ness is not having any marked encour-
aging reflection on the balance sheets.
The very strongest kind of bull tips on