The Birmingham age-herald., 1909-06-13
NICHOLAS WALL
 STREET LETTER Leng Sustained Rise Leads to
 Profit Taking SOUTHERN PACIFIC STOCK Stockholders Have Unique Proposition To solve-The Steel Trade Con- tlnues Remarkably Good.
 Orders Pouring In.
SOUTHERN PACIFIC STOCK
BY w. G. NICHOLAS.

New York, June 12.-Wall street condi- tions are in that state of confusion which the security market always runs into when a halting of movement occurs. The long-sustained rise in many leading stocks induces profit taking on a large scale and also encourages renewed short selling. The wonder of the situation from the Wall street point of view Is, Who is doing the buying7
 There is certainly not the least appear ance of what Is called public speculation -or at least but the merest trace of it. so that the only solution of the question would seem to be that the big interests of the country, believing in the future, are investing heavily in American securi- ties. As to the smaller interests, the great activity of the odd-lot houses testi- fies to the picking up of small quantities of stock from all over the country. Crop reports all point to the conclusion that at least a fair total average harvest wlll be secured When this is beyond doubt another great burst of speculative ac- tivity may be looked for.
 The main topic of conversation just now is the plan for the conversion or re- IlTeu6nI OI Iil6 pTeltIItu SlOCh Ol &#Oulil- ern Pacific. The official proposition gives the stockholders three alternatives: l, To exchange such stock for like amount of said AZ per cent bonds and s20 per share in cash. 2, To convert such stock into the common stock of the com pany dollar for dollar. 3. To surrender the said stock on July 15 and receive sl15 per share therefor. Proposition 1 will probably not meet with much acceptance, as a AZ per cent bond would look high at 105, which, plus $20. would mean yield ing up preferred stock for about Sl25--a good deal below where 1t is selling. Prop osition has its speculative temptation in the possibilities ahead of the common stock, but there would be no temptation unless there is reasonable certainty that the common stock dividend is to be in creased to per cent or more. Proposi- tion might just as well have been left out
 Of course a question which must imme- diately suggest itself to preferred share holders is, Why not sell their stock at the market and take the cash proceeds for reinvestment as they may see fit? Here again the point to be made against this is the belief that Southern Pacific common is going immediately to become very much more valuable than it is now. Here. indeed, is the nub of the whole matter. Without such possible outcome the whole proposition would be very un- attractive. That there Is a good deal of conflict of opinion is evident from the marked nervousness of Southern Pacific common, the publication of the plan havS. ing been hailed by a drop of or points,
 Coincident with this Union Pacific rises. This is logical, as whatever readjust- ment of Southern Pacific affairs Is made Union Pacific's holdings of Southern Pa ci1c stocks can be counted upon to ben eft Perhaps of more importance than the actual transaction is the evidence that so shrewd a man as E. H. Harri- man believes the situation sufficiently settled to spring this huge financing plan uopn the public. MT. Hartman is now in Paris and all Wall street waits eagerly to hear of the doings there of the latest Napoleon of finance.