The Washington times., 1912-01-21

| weakness dozen times or more. There
were, to be sure, certain divertins
movements In specialties. such as the
new tobacco issues of the Liggett &
Myers and p. Lorillard Companies
which scored skyrocket advances. but
the movements In the stocks and bonds
Of these companies appeared to detract
from rather than add to the attrac.
tiveness Of the general list. In fact. In
the fore part Of the week there was q
clearly defined drift away from old
[, time speculative favorites like Union
Pacific and Steel, while some of the
| best railway stocks on the Exchange
rarely appeared upon the tape at all
The whole performance had very
| much the appearance as though the
trading element had grown weary OF
the old group Of stocks upon which
| they had concentrated their efforts fol
80 many months past, and were search.
ing the markets for more attractive
counters Amaigamated Copper. Brook.
iyn Rapid Transit, Western Union,
Missouri Pacific and Third Avenue were
tried In turn. These failed utterly to
arouse general interest, although The
| movements were responsible for some
highly entertaining stories put out by
| way of explanations AS soon as the
| special buying ceased in such issues
they Immediately relapsed into dull.
ness and usually sagged in price.
Ancient Rumor Revived.
| change both as to activity and price
tendency. Business expanded about 90
per cent and prices advanced rapidly
for a long time and yet the basis for
the revival or change appeared to be
nothing more than a continuance of
the original program: that of search
ing for some stimulating security. The
traders apparently found what they
were looking for in the Hill stocks,
Great Northern and Northern Pacific. II
they were more successful In this quar-
ter than elsewhere an explanation
might be found In the fact that bet
ter tactics were employed inasmuch
as the demonstration In the stocks was
preceded by an upbidding Of Chicago,
Burlington and Quincy joint 4 per cent
Pacific and Great Northern are respon-
sible.
1t must be admitted that it Is a rather
stale story that was served UP to Wall
Street in connection with this move
ment, nothing more CT less than the
tirement Of the joint bonds and the
! taking over of the Burlington property
I by the Great Northern. with an I'M
covering Of. and. Of course. "segrega-
story. appears in very many ways, and
almost any version Of 1t will do. There
IL no very great likelihood OF its being
any more true at the present time than
disappointment IT ought to be a
source OF great satisfaction TO the trad
ing element. II It Wee true It would
speedily put the Burlington rumor out
would wall Street do II II could rot
from time TO time. in tho future, take
over the Burlington road and arrange
for tue distribution OF concealed
equities?
Stimulating Bond Market.
The really interesting pr ase Of this
matter, however, Is not the revival of
the ancient rumor. but the fact that the
trading program succeeded in the end
chiefly because the movement in the
Hill stocks originated in the bond divi-
sion. So long as the efforts to stimu-
late tie market were confined to an up
bidding of stocks they had no vitalizing
influence whatever but they certainly
did have an effect almost the instant
that the Burlington bonds were mad,
strong and active. This suggests the
idea that speculative effort may mani
fest Itself more and more in the bond
division Of the market not necessarily
with the high-grade Investment issues,
but with speculative descriptions and
ISSUES ks tae w nsw IS sna
Sary to create q market.
Manipulation In bonds does not, of
course. appeal to the better grade of
banking and investment houses. but it
Is resorted to on occasions, ard there
have been several instances Of tine kind
in the last eighteen months preliminary,
In each case, 10 heavy outrour.hgs of
new security issues. There is. perhaps.
more to justify movement of this
character now than on some other &C.
casions, partly because there is every
sssurance Of cheap. and abundant
m6ney for long period to come. and
tinued unsettlement of confidence arts
ing out of political uncertainties. AM
the Ike. This has the tendency of
checking confident speculative opera
direction Of more stable and better
securities.
Worth of Investment Capital.
Up to the present week important
iirst-hand banking houses have ex-
pressed doubt as to whether new is
sues of bonds could be placed on a sat.
isfactory basis at the present time, but
that some Of them are feeling their way
IN that direction is clearly enough in
dictated by the announcements, during
the week, of an impending sale of a
divisional bond by the Chicago and
Northwestern and Of an additional
block Of convertibles by the Norfolk and
Western. while the Chicago, Rock
Island and Pacific railway brought out
new debenture issue. This latter at
tracted more attention than the others
because the company endeavored to
solve the problem of the increased worth
Of investment capital by abandoning the
sale Of its refundlng As and issuing
SIC ,O00,h00 debentures bearing s per cent.
II can scarcely be SAID that either of
the above issues furnishes the real test
that the financial district is looking for,
concerning the price or/the basis for a
large. new bond issue and whether they
Will sci! readily. The Rock Island issue
does not d.: So partiy because its first
and refunding mortgage IS sell from
ten to twelve points below the present
range for a security of a New York
savings bank standard. clearly show
ing that the company, IL in better credit,
would not have to pay as high as per
cent Tor funds secured through de-