Omaha daily bee., 1908-04-27
REVIVAL OF CREDIT
Sale Of Pennsylvania Bond Issue
Points to Improvement.
MARKS TURN IN THE TIDE
Heavy Subscription Shows Strength
Of Banking Position.
PLENTY OF FUNDS IN SIGHT
Money Can Be Secured for Extensions
and Improvements.
PLENTY OF FUNDs IN sIGHT
CAUsEs RIsE IN UNION PAOIFIC
Relief that Incident Insures succe
os Proposed Loan nesuIts
Advance in Price Of 20.
stock.

NEW YORK. April 2s.--speculative 81
timent as reflected in the securities max
ket last week took heart decidedly and
stocks and bonds were absorbed with
growing confidence and Increasing vol
ume The dominant factor in causing
the Improvement was the betterment Of
the Investment situation. and the Incl
dent most relied on to point this Improve
ment was the sucress Of the Pennsylvania
bond issue II is many years since a
single financial transaction has been
invested with 80 much Significance as
this Pennsylvania operation. Aanologies
arc drawn with the s5cOO0.0oO. Lake
shore and the 500 100000 New York Cen
tra bond issues in the spring OF 1891
which marked in decisive way the re-
establishment Of credit and the start of
that growth OF prosperity in the coun-
try which ran ultimately to unprecedented
heights. The comparison offers some
striking contrasts The Vanderbilt issues
were iOO-year sM per cent general refund
ing mortgage and the par value realized
for them was heraided as marking a new
era in American railroad finance. The
event proved that this new basis Of in
terest return on capital was not TO be
permanent and was due In large part TO
the prolonged prostration which had pre-
AthDb IL AouHitO viii ulaAIheA anu AiAhi0-
ity OF capital. which had prompted its
boarding and accumulation 70 a point of
extreme redundancy
Revival of Credit.
The terms Of the present Pennsylvania
issue indicate no such unwieldy plethora
OF Idle capital the forty-year present
bonds being sold 10 subscribers at sS
From which must be deducted the un-
known bankers compensation 10 arrive at
the yield to the issuing company. The
Pennsylvania bond sale. however has had
the effect of creating confidence that the
revival OF credit OF the railroads has
set In and foreshadows the arrest Of the
industrial and commercial contraction.
Collateral influences expected To flow
from this chief deveopment Of the week
played a iaree part IN the stock market
Improvement. The participation to the ex-
tent Of half the new loan by the great
banking houses OF n NJ. Rothschiid &
Sons and Barring Bros. & Co., limited OF
London, has stimulated expectations Of a
widening Interest on the, part Of foreign
investors in the new issue Of American
securities which arc known TO be imminent
az conditions may become prosperous
Union Pacific had been especially affected.
as its plans Cor coming bond issue have
been announced already and its banking
connections are with Kuhn. Loeb & Co,
through which the foreign participation in
the Pcnnsylvania loan was enlisted
Banking Position strong.
Tho heavy subscriptions for the new issue
demonstrates the strength OF the banking
position in New York and the betterment
IN the investment position. This has
brought announcements Of other proposed
issues of new securities, and OF their pur-
chase by the banking houses. and gem
eral impression OF returning confidence on
the part uf investors and Of re-estabIish-
ment Of credit was caused Hope was
stimulated AZ the same time that industry
would be revived with the supply of re-
sources to the railroads to resume the work
Of construction. Improvement and extension
interrupted BY the financial crash last year
The effect on the securities market. while
marked. has been sober and restrained and
without symptoms OF speculative excite
ment. This restraint is partly due 70
qualifying considerations IN the outlook
The new Financing, while reflecting marked
Improvement in conditions over those of
me recent past de not indicate the full
restoration OF normal conditions. either Of
credit or Of capital supply. The immediate
conditions in Industry and commerce, also
are not ef cheering effect