New-York tribune., 1909-04-05
FINANCIAL MARKETS
STOCK T4LUES HIGHER
Manipulation in Eridence-Mo"ey
and Exchange Conditions.

- - en- b.loy- the high range reported in
tho carly part Of 1907 Current prices on tIic
average arc still well under the record b,@i>ils
fe7,~ee Of 1906. but speculative enthusiasm
suddenly has increased TO an extent that X en-
courasins predictions in Wall Street that quota
tiens on the present movement VIII pass an
preceding bull levels. notwithstanding various
factors in the general situation that ought u
suggest caution in further operations Tor ihe
rise at this particular period. The fanihar eN-
bibitioD Of unloading stocks in one part of the
list under cover Of bidding up prices elsewhere
was presented in last weeks transactions; ma
inhalation Of quotations in order TO attract d
public b}Iving demand a common occur
rar,s and The pvran1iding OF accounts on the
strength OF accumulated paper profts by short
sighted commission house traders was reported.
The short interest was extensively reduced ana
technical conditions of speculation thereby ma
teriallv wea akened. Supporting orders were nor
wanting on indications of weakness. but the
position of speculation nevertheless. presented
at the close of the week many indications war
rauting refusal on the part OF marginal operators
70 STAY out of the market, though such indlca-
tjoe were not effective in influencing the trad
e7s -ho alvavs are bullish at the top and bear
isb at the bottom The public responded TO the
advance in greater numbers than recorded at
anv time in recent months, being urged on by
the talk of a long period Of easy money by pre-
dictions Of an immediate return of normal
affairs in the business world. and by the gratui-
tons advice of professional dealers 10 get aboard
a market in which the concentrated power OF
organized capitalists would send values klung
TO levels never before heard of A certain
class of Wall Street advices In the week read
Iil,a osrc,s advertisements and they did little
credit To the supposed intelligence of the spec
ulative community.
Stocks have advanced 10 point that as
counts future Improvement in the lndustrlai SIT
,1ation but the movement may be carried fuF-
ther before it falls from its own weight Money
sllrDljes are large enough TO provide accommo-
datiou at easy rates for every one VINO Wlshes
to trade on borrowed funds, and the banks are
ONLY too willing to extend accommodation oiI
call knowing quite well that no loss VIII IAN
upon them. even if crazy speculation undermlhes
the carelessy constructed plans for the acquire
ment Of sudden wealth by the people VINO De
lieve that the market this time VIII prove an
execution to the rule that always Worhs against
the rroDosition that stocks are a safe marginal
nurchase after long period Of advancing values
II Is not safe TO bank or the certainty OF prohts
in purchases at the current range unless the
operator is able 10 supply large proportion oI
the actual cost Of the stock he buys ana is VIII
ing to carry his account through the reactions
which are inevitable. Ultimately securities no
doubt Will sell above the record Of 1906 It
appears probable that if the Union Pacific con-
times to make progress on the lines reported IN
recent years its common stock Will go beyohd
900: il is fair assume that United states steer
common at some time in the future VIII go
a..
mar and sell higher than its best quotation: mat
Southern Pacific viii reach $50 and better and
that Atchson common will do nearly as well.
Il appears absurd, however. TO believe that these
levels will be touched in the near future. South
or1, Pacific has been doomed the theory that
the dividend will be advanced In the fall. but Mr..
Hartman announces that the companys direc-
tors have no dividend increases in mind as il is
their policy TO put surplus funds into the prop
ertv Southern Pacific can be bought 10 return
=
good investment purchase. while the same thing
NAV be said Of Union Pa ciiC, which returns at
present a little more than per cent Further
advances. however, IN their quotations VIII not
make them particularly attractive as actual pur-
chases and the same applies to New York Cen
trail which yields IS per cent; Pennsylvania.
- per cent: Sugar Refining. So per cent; AtChi-
son 46 per cent: Baltimore & Ohio, 50 per cent
St. Paul. A. per cent. and United States Steel
preferred. 81 per cent Steel common az last
weeks high price represented a return of 80
per cent, Amalgamated Copper a return Of 2s
per cent and Reading a-return Of % per cent.
The three stocks Just named were among the
most active issues dealt in in last weeks mar
l,et but it is not likely that any of the pur-
Chascs were for investment account. Steel
common would be a different matter in the
thirties The iron and steel industry Will, Of
course return to the basis Of normal activity,
and in years to come the earning capacity of
the United States Steel Corporation will be
mind that the concern suffered a tremendous
loss in earnings last year, that so far this year
results have been on an even poorer level. and
that no great substantial Improvement be
looked for before 1910. 1t is estimated that
present basis Of prices for steel products the
steel corporation is neither earning It's preferred
nor its common dividend, and there is. therefore
no certainty that the directors will not suspend
for a time the dividend on the common shares
Just as they did several years ago. when the steel
Tax.
preferred stock is considered absolutely safe
per cent investment issue. and holders need
not worry over its future. The common is still
IN the semi-investment and speculative class,
but il. TOO. IL time 10 come, will doubtless rank
IS a permanent income payer of high merit.
Just now however. il is foolish for any one to
listen to the talk that its price Is the way 20
par. II may be on the way TO par by round
about course. involving many backward slides
and covering long period OF time. The biggest
people interested in the metal shares from
speculative point OF view exceedingly clever
in inducing stocks to move on lines after their
own ideas. and many careful market observers
believe that some bright morning the Street will
wake up the fact that these interested parties
have disposed Of their holdings and guiding
their quotations toward attractive repurchas-
ing level Reading per cent stock is sell
ing at range that does not appeal TO investors
and as there is no probability Of a larger divi-
derd there is no inducement TO buy the stock for
income return. Bonds are active. and much in
vestment capital is moving into this department.
of the market. while there also is an active
speculative movement in the second grade mort
gage issues.
From the investment and business point Of
view the most encouraging factor in the situa
zion is the supreme confidence expressed by
business men and fnanciers over the future po-
sition Of affairs in this country. Confidence
breeds prosperity. The tariff question may not
be settled in a manner pleasing to every man in
the nation bat the great majority of men in
commercial life believe that tariff changes will
be made on lines that will prove Of the greatest