Los Angeles herald., 1908-02-20
NEW YORK STOCK
AND BOND MARKET

NEW YORK, Feb. 10. The feature of the
financial situation which brought into
notice by sthe action Of todays stock market
was the position of corporations especially the
railroads. with important maturing obligations
to meet, while the falling off in their earn
ing power has encroached far on the mar
gin of surplus available for distribution as to
seriously impair the market standing of securt-
ties. The Gould group was Rcutely affected
by the considerations today. and securities Of
other companies whose condition is believed to
be analogous, showed the greatest sympathy.
The degree Of resistance shown by the general
market however. to the influence OF the de-
moralzed break in the Gould stocks was
worthy of remark In the early stages the
contrary movement in Missouri Pacific was
ignored ard prices elsewhere made some head
way upwards, and there was a Anal rally to
the best.
The rise was halted and general reaction
cnsued, but 1t was moderate compared with
the fall in the stocks most affected The
slumping tendency extended to some points IN
the bond market we'll, where the same gem
eral causes were at work.
Railroad companies very generally were
forced last year into temporary expedients Tor
financing their requirements and the rush OF
business at the0time and the high cost OF ope-
ration and all kinds OF equipment ADDED ma
terially to the urgency Of these needs.
It was assumed at an early stage OF the
banking crisis last fall that In the revuision
to follow there would be such piiing up or
cash banking reserves as would lead 10 re-
dundant money and assist in the refunding OF
the notes referred to as they might mature.
But the event is proving that the railing on
In business which released money from active
circulation for return to bring reserves must
be reckoned with also on the side OF dfmin-
ished earnings power with which to meet the
charges on borrowings.
The steps are now being taken toward re-
trenchment and economies of the railroads to
meet the falling off in business offer one OF the
leading subjects Of the financial world.
Today there were reports OF concerted ac-
n &
INK towards a reduction In wages on their
systems. Fears of the strike troubles that
may follow are an appreciate inhuence III
the undertone of depression In the securities
market Retrenchment and economy, now
ever, cannot escape the obligation for expendi-
lures already made. and the burden OF sucn
obligations was the point Of emphasis IN the
lesson nculcated by the days doinss ~ s.ochs.
belief prevailed that an aggravating cause
of the extreme depression shown by some OF
the stocks was the forced selling Of them In
the liquidation Of loans. in which they inquired
as collateral and which are now maturing.
Recurring liquidation OF this kind has been
in evidence from time to time ever since the
emergency terms which were forced on neeuy
borrowers last fall. Fears OF sucn nquioatioIi
remaining to be completed are camper on
the demand for stocks. Reports of an INTENDED
receivership for Missouri Pacific, which were
stimulated by the action Of the stock, were
denied by the head of the SYSTEM =. zoo,
The stock sold low as 2Sm. Early IN 1881
Missouri Pacific sold at 10, but rise later IN
that year put 1t to an altitude above ,ooay
price. above which II was held at varying de-
efecs ever since. Western Union at Al. today
low price was the low record since 1870. when
II touched 30ls. Another decline IN copper was
Incident TO the day.
Money on call went about per cent Tor the
frs. time in many days
PAYMENT OF a 20 per cent installment OF SUD
scriptions to Canadian Pacific stock was
factor in the money market. Sterling exchange
continued firm and kept alive discussion OF a
possible outward movement OF gold at an early
date. :. AZ. .
rebound.
Bonds were weak. Total sales par value.
So 10000 Government IS advanced "a per
cent on call.