New-York tribune., 1909-12-20
FINANCIAL MARK EFT
STOCKS IRE HIGHER.
Money Remains at Stiff Levels
scith No Indication of
Declining.

upon NIiC aNcA 49,
the few factors upon which bear traders
based operations for the decline failed
10 upset the calculations Of substantial
interests. who are looking forward 10
higher levels in the new year. or TO un-
settle sentiment in investment quarters
The market moved in a manner best
suited 10 the current position OF money
Leading bankers are anxious 10 maintain
stability in the stock market. but they
are not extending any encouragement TO
SPECTATORS, who believe that. irrespective
OF monetary conditions, prices of securi-
ties should be pushed TO a materially
better range Immediately. In the larger
number of investment issues prices fully
measure actual worth. while there are
many instances where investors cannot
be induced TO buy, owing TO the small
income yield represented by prevailing
quotations, as in the case OF Reading,
which is now on a 6 per cent dividend
basis, with only 31a per cent return.
The speculative community is prepar-
ing for an active outside demand for
stocks following the January interest and
dividend disbursements. but II may be
well to bear in mind that the cost Of
living is exceedingly high. and that as a
consequence investors. after paying their
bills and strengthening bank accounts 10
run them along until the next income
period. may not have much Of a surplus
for reinvestment or for speculation in
securities. In recent years interest and
dividend disbursements have failed TO
hiring irr, ,f-{aS
for stock and bonds People with idle
funds in their hands doubtless for a long
time TO come will be able to secure a
better return in the loan market than in
securities for the good reason that all
indications point TO the maintenance Of
a stiff price for funds in 1910. Under
ordinary conditions easy money follows
the January disbursements, but there is
no prospect that such will be the case In
the new year. Domestic requirements for
accommodation will be heavy, while the
European situation suggests active de-
mands 10y the Continent for money and
temporary financing by the British Treas
ury 10 an extent that will exert 4 severe
stra in on the market
The Bank of England lost more than
S12O0O.0O0 gold last week, the small re-
taxation in its discount rate serving TO
revive the demand upon the Institution
Tor the metal while the course of the
local foreign exchange market suggested
the probability of a call upon this centre
Tor gold for European account before the
close OF the year. Notwithstanding a
large increase in exports OF merchandise
from this country in the month of No
Vember. and an excess of exports over
imports 10 the amount Of almost S54-
100000. sterling rates remain at an alb
normally nigh level for this season, with
no indications OF an easing in quotations
IN the near future to a point at which
gold could be brought TO New York from
ABROAD. London continues to settle its
obligations in South America at the ex-
pense OF our market. which il is ena bIed
10 90 through its credits here Though
Foreign commerce statements show an
apparent balance in our favor we are in
debt TO Europe, and the excess of ex-
ports OF merchandise from here in the
eleven months ended November 30 of
S2le,99S.103 has been offset by the
undeTvaluation of imports. by American
travellers expenditures abroad. by in
tereSt payments due TO foreign holders of
American securities and by other factors
In international financial movements too
well known 10 the readers of this column
10 need enumeration.
This country is heavily in debt TO Eu-
rope, and II is TO be hoped that our
Obligations will be liquidated through an
active movement Of European capital
INTO our investment issues. According
TO well Informed bankers. the prospects
Tor d good demand for American secu-
rites are excellent. and in connection
with this II is interesting to note that in
the week just closed q prominent local
banking house placed $4,000. 900 ST
Louis q san Francisco general lien bonds
III france II Is quite likely that the
railroads Will issue d large amount of
new securities in the new year, and it is
DeheVed IN banking quarters that con-
siderable portion Of the offerings will be
taken by foreign bankers for sale 10
european investors. Prices for the
larger number OF existing railroad issues
are too high 70 attract foreign buying
except Tor a speculative turn. but II is
I not improbable that the successful DIac-
ing OF United States Steel common with
/ French buyers will be effective in in
ducing an inquiry for our Industrial
securities that possess intrinsic merit
I Industrial shares in most cases are rela-
lively cheaper than the railroad shares
and there is reason TO believe that the
industrials will receive the preference in
the speculative and investment buving
in 1910.
Increased dividends have been a feat
ure OF recent news affecting several
American railroad corporations. but as
rule the prices Of the stocks concerned
4 wholly measure the advance in the in
come yield. Reading was placed on a 6
I per cent basis last week Louisville a
! Nashville was advanced TO a per cent
/ level and in the preceding week ST
/ Louis Southwestern preferred was estab-
/ lished in the Per cent column Read
! ing returns about 3l2 per cent as a
per cent stock and Louisville & Nash
/ vile - per cent as a : per cent issue.
! IL Is believed that Southern Pacific will
be made a per cent stock in 1910 and
! that with the increase in that security
the directors OF the Union Pacific will
feel justified in increasin the rate IN
Union Pacific TO y per cent basing the
additional payment on income from in
Vestments rather than from earnings
/ though the companys current income
from the actual operation Of its prop
! erty is at the rate Of more than Is per
{ cent year OF its common stock. South
Z ern Railway is expected To do something
/ tor its preferred holders in the new year:
/ likewise Rock Island. Hopes are enter
/ tanned OF return Of the PENNSYLVANIA
dividend 10 I per cent and New York
! Central TO per cent. while some observ-
/ ers go so far as 10 predict a payment on
Erie first preferred There are factors
however, that may work against in
/ creased dividends in the new year The
/ high cost Of living already is causing un-
rest among railroad employees, and If the
companies make a general advance in
wages dividend prospects may suffer
The railroads are paving high prices for
materials and they assert that II they
must pay better wages they viii be COM