New-York tribune., 1909-07-02
FINANCIAL AFFAIRS
STOCK PRICES STRONG.
Lack0Uanna' Melon Induces Short
Covering Money Rates Easy.

On light volume OF business stock market
prices moved toward higher level in the best
part OF the day gains. however rule being
confined 10 small figures. In Reading, Southern
Pacific Union Pacific and United States Steel
trading was moderately active, but elsewhere
among the prominent shares there was no indt-
cation Of life. the few transactions recorded rep
resenting little beyond the dealings of the room
element. The general strength in the afternoon
based entirely on the covering Of short con-
tracts. which appeared to be bought in on the
theory that the announcement Of rich benefits
for the Lackawanna stockholders might he fol-
lowed in the near future by similar announce
ments by other properties, though the Lacka-
wanna operation. being in large part the out
come of conditions forced by the recent ruling
Of the Supreme Court the commodity clause
of the Hepburn law, presented no real encour-
agement for people who are looking for summer
stock melons. Reading and Erie responded in
satisfactory manner to the Lackawanna news,
but the high price of Lackawanna stock and
the small amount outside of investors boxes
prevented any especial reflection OF the pro-
posed distribution TO shareholders in the mar
ket quotation of the issue. which sold at $50 on
a cash transaction Of 120 shares and at 649 OK
dividend on 100 shares, the latter price being
somewhat puzzling in view Of the fact that the
dividend declared amounted to so per cent With
the exception Of the local traction issues there
was no stock that showed the effect of selling
pressure in the day, Third Avenue and the In
terborough- Metropolitan being among the few
fessional account. United States Steel common
sold within a fraction of its highest ever re-
corded. while the preferred also was strong on
buying that came from houses that are identified
more with investment operations than with
speculation. Wall Street houses look for a re-
investment of July interest and dividend pay
ments. but IL is doubtful iF the movement will
reach large proportions owing to the fact that
most investors need their income for employ
ment in their business and to meet the current
high cost Of living.
Industrial stocks are being bought on reces-
sions by Wall Street houses that handle the ac-
counts of substantial market interests. and in
well informed circles it is believed the next great
speculation will be in this group Of securities.
Operators who are interested in the industrials
are doing nothing TO bring about higher prices
at the moment. Indeed. they appear anxious TO
prevent anything in the nature Of boom, and
il Is likely they would welcome sharp setback
IN the railroad issues. as such movement
would exert a sympathetic influence upon the
industrias and afford more attractive levels for
accumulation. The character Of the buying on
reactions in United States Steel common and
preferred. in the railway equipment shares,
Anaalgarnated Copper and Anaconda suggests
that stocks of this class being taken to hold
for future upward movements, while the selling
in many of the railroad issues on advances ap-
parently reflects disposition the part of
prominent operators to transfer their accounts
to the industrials The latter a rule have
not enjoyed anything like the Improvement that
has been recorded by the railway shares in
recent months. and as industrial activity is
developing on lines that have all the earmarks
of permarency increased speculative and in
vestment interest in the representative indus
trial securities Will surprise no one. The dtVt-
dend records of many Of the stocks of industrial
companies notably in the case Of the preferred
shares encourage investment confidence IN
them a reflection of which is found in the in
crease in the last two years In the number of
stockholders in such concerns as the United
States Steel Corporation the American Car
and Foundry Company. the American Locomo-
tive Company the United States Rubber Com
many and the American Sugar Refining Com
pany. Wall Street enthusiasm over the indus
trials doubtless will be overdone, and In connec-
ton with this possibility it may be well TO note
that the idea held in some quarters that the d.
rectors of the United States Steel Corpora ton
will place the common stock on per cent
basis at the next quarterly meeting Is not
based on the best information from sources close
to the management Of the corporation or upon
the well known conservatism of the men who
make up the finance committee of the concern.
There is little reason to doubt, however. that
eventually this stock will mako q larger return
its holders.
The first day of the new fiscal year passed
without the development of important changes
in the money market Loan quotations re-
Iuained at an easy level, with the demand ex-
tre1nely limited and with no indication of an
immediate expansion in the speculative and
mercantile inquiry for accommodation. Manu-
featuring concerns are well supplied with cash.
while the light offerings of commercial paper
suggest that merchants current needs are Wen
provided for The Bank Of England made no
cha nge in its minimum rate of discount yester-
dav though showing heavy drop in its proper
lion of reserve to liability. while on the Con-
rinent discounts were lower. The decline in
the Bank Of England reserve was due entirely
70 operations incident 70 the preparations for
the half yearly interest payments and did not
represent an actual decline in bank holdings.
Sbo a considarz ble