The Washington times., 1912-01-14

somewhat, the prevailing m0notOny tney
did not effect any change In. the char
acter Of the trading or alter the course
OF the market to any great extent. In
other words, despite some favorable
happenings, dealings continued profess
sional and prices were highly irregular.
the gains recorded one day being Offset
by losses the next. and SO on alter
nately until the end OF the trading in
terval.
Even the strength impaired to the
shares Of the anthracite coal railways
by the final announcement Of the Le-
high Valleys segregation plan. or
melon" did not communicate to the
general list On Friday, for instance.
Reading was taken in hand and bid
up sharply. under the theory that It
was next in order for segregation and
readjustmelt, while Lehigh Valley,
which was the source and origin Of all
the professional enthusiasm. remainN
inert and failed utterly to fulfill the
predictions of fifteen to twenty-poipt
advance which was an accompanying
feature Of the long-continued and wide
ly circulated 'melon-cutting'' rumor.
Lehigh Valleys Melon.
Perhaps one reason for the disappoint-
ing response which Lehigh Valley made
to the extra 10 per cent dividend de-
clared by the company was due to the
inability Of the average person to figure
out the alternative proposition. That
Ii. the company offered 10 per cent
dividend in cash, accompanied by a
proposal that this amount might be
devoted to the purchase of shares in
a new concern, the Lehigh Valley Coal
Sales Company, which is to be incor-
porated with capital of SO, ,0O0, 900. This
company Is to enter into q contract
with the Lehigh Valley railroad for the
purchase and sale of it's coal on terms
which are not as yet specified or even
indicated.
Naturally there is a great deal of con-
fusion in the mind of the average lay
man as to how this scheme will work
out, and there really appears no way
by which one may determine the value
or earning capacity Of the new com
pany. until one ascertains something
about the quantity Of coal 1t may ham
die and the basis on which 1t Is to
handle II. or course the contract may
be highly profitable to the Coal Sales
Company, but II SO. 1t would seem that
there should be a corresponding offset
in diminished profits to the railroad.
for one cannot eat his cake and have
1t too. Ahother feature connected With,
the plan is that the shareholder rer
ceives no subscription warrant. or
rights" He must either take his 10
per cent in cash or devote 1t to the
purchase of the stock, and II he don't
take the stock a syndicate Is prepared
to do so. 4Ss
Professional Maneuvering.
Why Reading should have been whip
ped up on the Lehigh Valley segrega-
ton plan, when Lehigh Valley remained
practically stationary, and from time to
time seemed to be subject to extensive
inside selling. does not appear clear. but
then Wall Street Is a law unto itself
in such matters. One theory, to be
sure. was that the Lehigh plan had no
more to do with the Reading movement
than to suggest the idea Of segregation
with that property, and that the actual
basis for Readings advance was large
outstanding short interest in the stock
which was driven to cover by aggressive
professional buying. What lends an ell
ement of confirmation to this theory is
that Reading has recently been the sub
Ject of much bearish talk and very
likely Of considerable short selling.
Like Reading. Union Pacific, also, has
been singled out for very much bearish
talk, and one again hears stories of a
mysterious selling movement in the
stock, very much like that which dis
turbed Wall Street during the summer.
The inception of the former movement,
however, is no longer mystery. for 1t
is now very well known that 1t was
due to woeful misjudgment of the gen.
eral situation by a member of an inter-
national banking group, who induced
his foreign connections-English,F French
and German-to buy heavily of. the
stock. The Moroccan disturbance forced
liquidation on the part of the foreign
holders and an aggressive bear party
In Wall Street did the rest. Aside from
the recent unsatisfactory earnings,
there appears no special reason for the
weakness in Union Pacific, but there is
much bearish gossip and some selling
which has the ear-marks Of liquidation.
Harvester Financing.
Another matter which gave the finan-
ciaI district something to fret and fume
about were the rumors of an imperd-
ing sale by the International Harvester
Company of $40, 600 900 per cent three
year notes, There is, of course, no
question as to the security of such a
ncte If 1t is issued. The rub comes in
connection with some past developments
OF an unuSudl Hdture III tle company,
and the purpose of the proposed issue,
which is that of funding a floating in
debtsdness. The point of criticism
grows out of the fact that not much
above eighteen months ago the COM
pany declared q stock dividend of SO 1-3
per cent. thereby increasing the COM
NOR stock from $60,0G0.N0 10 SS0,OtD, ,OOD;
the 0DJ distributed being identical
i'll amount with that of the impending
note issue.
The reason commonly ascribed for
the $40 100000 stock dividend was that
the Harvester Company's Earnings We're
such that 1T was desirable tC conceal
them through Il big capitalization.
Dividends We're begun al per cent call
ing for s3,2O0,00b, and last year these
Were raised to per cent, reqtirin,s
$4,000, 900, which would have estab-
lshed rate of &c per cent If the Hnr-
vester Company had continued it's capt.
tai at SO,OCO,C Sinre the company has
accumulated large floating debt Wall
Street thinks that 1t would have been
better TO have sold $4,000, 600 stock for
cash or to have paid smaller dividarids
On the other hand, however, the com
pany could not forasee the difficulties
1t has had with the Government. or
that farmers would buy so many auto
| mobiles that they could not nav
promptly for agricultural irapiements.
Meeting Note With Note.
Slow pay on the part Of the farmers
and agents. it is said. forced the Har-