New-York tribune., 1909-05-17
FINANCIAL MARKETS
HIGH STOCK VALUES.
Ne1o Records for Year in Last
Weeks Trading-Money and
Erchange Conditions.

number OF shares the best figures ever reported
were reached, the advancing movement being
accompanied by heavy dealings by powerful
speculative interests who apparently were con-
WINGED that general conditions warranted better
price levels. And the public followed the lead
of the professional element buying stocks at
quotations which a few months ago were
thought improbable at any time in the current
year Outsiders who would not touch securi-
ties when they We're selling many points under
the present range are now willing to make
ventures on the long side Of speculation in the
confident belief that. unlike the bull markets Of
the past. the speculation now under way Will
run on Indefinitely and bring huge profits on
operations conducted on borrowed money
Money is easy and favors the bull element. but
both money and stocks are tending toward in
1ation. a consideration that ought to create n
more cautious attitude the part Of present
operators for higher values. Since the first %
the year paper money as represented by
national bank notes has increased upward Of
s50.OO0.OO0. while in the same time the country
has exported more than S42000,OO0 Of gold, with
indications pointing toward further shipments
of the metal owing to the unusual conditions in
the international exchanges and the evil work
ings of our anticipated currency system Ma
tional bank note circulation has increased at a
rate not warranted by the needs of leE~tlmate
business and the total now outstanding of more
than S6SS. 600 600 looks like initiation. Money in
fation fosters dangerous speculation in stocks
and commodities. and in view Of the aggressive
operations for the rise that have been going on
for so many months the current situation does
not look altogether safe for Wall Street, though
the mere suggestion that adverse conditions will
develop a result Of speculation IS not indorsed
by the speculative community. The chief sellers
of stocks just are the people who bought
when prices were lower, this selling including
the disposal of stocks actually owned and which
show such heavy paper profits that holders are
willing to turn them into cash in the eXpecta-
tion of being able to buy again at lower quota
tfons Much idle money however, is moving
into bonds that still return q reasonable income
In the last few months more than S575.O00.OGO
Of securities have been marketed and from
present indications the year VIII see the greatest
OUTPUT OF new issues ever recorded.
At the beginning of the year the average
price of twenty prominent railroad stocks was
1908 and that of twelve leading industrlals
S623 In the latter part of February the low
record of the year was made at 1890 for the
railroads and 80 81 for the industrials, the sub
sequent course of values TO the present time
with only minor setbacks being in the direction
of better figures, last weeks high standing at
T25.7S for the railroads and 1925 for the indus
trials, both groups being under the best reported
in 1907 and 1906. The fact that the records OF
the years Just named have not Yet been reached
encourages the bull element in the idea that in
the course of 1909 ali past high points viii be
exceeded. but at the moment conservative cir
cles contend that the Improvement far made
has than discounted present and pro-
spective gains in industrial and financial affairs
and that extended trading on margins at pre-
vailing quotations invites heavy losses for en-
thusiastic bulls. Such consideration. however,
will not prevent further transactions along lines
that lust now offer the least resistance Their
are no aggressive bears IN the Street. Traders
are unwilling to make large commitments on the
short side but the fact remains, nevertheless
that distributing sales are being made and that
with each successive advance the technical 30
sition of speculation becomes weaker. There =
no reason for uneasiness on the part of in
veStors and many good reasons FOR the actual
purchase of stocks that have not yet passed the
level at which income yield ceases TO be at
tractive but in this connection il IS worthy of
note that only in 4 few railway shares is the re-
turn more than per cent Union Pacihc sun
Yields more than per cent. and 1t Is not un-
likely that the stock will go 10 200, at which
figure It would return even per cent TO in
yestors Delaware * Hudson. which IS a hlSh
grade issue. was advanced last week to IeNe'
Welding less than per cent; Reading al us
best price returned about 2l2 per cent thouRn
indications pointed to advance in its dividend
rate 10 6 per cent which it would net in
vestors less than per cent. The hard c"al
shares have been popular favorltes in the street
in recent DAYS. and from talk heard IN specu-
latiTe circles one might imagine that every
holder Of an anthracite security is about TO re
ceiye something enormous in the way or
bonus for being fortunate enough to own inc
issues Whatever plans are under way Tor th7
hetternlent Of the position Of the companies
values.
Ease in money and decided improvement in
the metal trade. together with enlarged Dank
clearings. growing railroad earnings and feel-
ing Of confidence on the part OF business men
throughout the country certainly are receiving
their f,IlI share of attention Wall Street II Is
extremely encouraging for the people who are
interested in the welfare of the country TO know
that business conditions are returning 70 a nor
NAL position. and the fact that real prosperity
will tend add to the
attractfveness Of American securities in the
ewes of foreign capital which already has been
something of a factor in the absorption Of the
new mort age issues Of our railroad companies
Intrinsic values have been materially strength
ened since the close Of 1908. and the outlook IS
promising for the establishment upon a dlVl-
dend ba sis of stocks which in recent years We're
compelled to suspend payments TO their owners
notably in the Of Missouri Paclhc' ROCK
Island preferred and Southern Railway pre-
ferred II need not be assumed, however, that
the non dividend payers are to be restored I'M
medfatey to the investment producing class, but
il is quite probable that in 1910 the companies
represented Will be in position TO make pay
rnents to their shareholders. Industrial secufl-
ties have been favorably affected by the i'm
proving tendency in the business world. and in
addition TO the speculative buying in this group
there also has been a good demand On invest
ment account, including mortgage issues, as
for instance the United States Steel sinking
fund as and the Bethlehem Steel 5s. United
states Steel preferred a solid per cent stock
yielding only a little under per cent, continues
to be bought by investors on the basis OF lS
relative cheapness and its safety as a perma-
nent income issue. while the common apparently
is being taken by operators who believe that
IN 1910 il viii be placed in the per cent list
Earnings OF the big corporation in the last two
quarters Of the current year doubtless viii ex-
pand to an extent that viii show for the twelve
months net results equal to per cent on the
common.