The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-03-06
FINANCIAL NEWS
AND COMMENT
Stock Market Upset by Terms Of
Chesapeake and Ohio
Financing.
L. s. STEEL SUPPORTS LIST
Foreign Factors Emphasized by
Presidents Address on
Canal Tolls.
U. s. STEEL SUPPORTS LIST

Stocks started yesterday rs though
they were going to continue the demon
stration Of rising strength indicated in
ness In London before the local opening.
prices displayed general nrmness In the
early dealings. but the display was
abruptly terminated by the development Of
pronounced weakness In Chesapeake and
Ohio. This was speedily accounted for
by the announcement Of the conditions
which the Chesapeake and Ohio had to
meet In order to place with bankers It's
new Issue OF s3s.00o.ooo Of I'VE year s
per cent. notes. which are underwritten
at 80 and are to be offered to the public
at q minimum OF 81.
Heavy selling was carried on in the
Chesapeake and Ohio shares most Of the
day and the stock sustained . net loss of
more than s points with very little rally
from bottom ngurea There were other
weak features. notably Baltimore and
Ohio. which was affected by a report that
the company was negotiating for the sale
Of $b0.O00.e00 of new securities, either
notes or bonds. Heaviness In various al :
rections was related to conjectural terms
OF new financing supposed to be neces-
ooAy wv kuc ulain pTtCco WeIe Ouiy
alphabetically affected by the break In
ths Chesapeake and Ohio shares. Deal
ings In that issue aggregated almost a
quarter OF tho total transactions OF the
day. and the expansion Of trading in the
general market was largely attributable
to tho selling activity induced In the fore
noon. For the most part sales in the
standard list appeared to be Of profess
sional origin and In the nature OF bear
ish commitments. Genuine liquidation
seemed to be confined TO q few descrip-
tons. The market as . whole gave evi-
dence OF q sound technical position. but
the situation obviously lacked attraction
for operations Of constructive sort.
New Haven took occasion 70 indulge In
a rally and there were some spectacular
manifestations OF strength In industrial
spsclaltiea Tho chief sustaining infiu-
ence was provided by United States Steel
In which what ID thought to be an un.
usually strong technical market position
prevails over distinctly adverse trade
conditions and prospects. No particular
credence was attached to q rumor Of no
sotiations for a settlement Of the Govern,
ment litigation against the United States
Steel Corporation and the rumor was OIL.
cially oontradicted. but its revival wal
an interesting symptom Of the expecta.
lions provoked by the Attorney-Generai'i
efforts to invite agreements with corpo-
ratio enterprise instead OF compelling re-
adjustment by lawsuits. Tho market WA
quiet In tho afternoon and almost dull
with some hardening movements In the
late dealings: but closing changes were
irregular and averaged q substantial de-
cline for tho day.
The Chesapeake and Ohio note issu,
provides for measurements which will
tend to strengthen the company's credit
materially at the expense OF the etockhold
ers for some years to come From ne'
earnings deductions agEregating $4,000
900 will have TO be made for capital ac
count during the next Ave years before
dividends can DO paid. This Ia partly the
| consequence OF a to. enthusiastic policy
of expansion In the past, which included
tho distribution OF dividends at rates moi
warranted by the company's programme
or credit status. In the end II will inurs
to the beneht Of the shareholders. while
II promises an early benefit to tho holders
OF other securities Of the road. II doei
not necessarily involve prospect OF en-
| tire suspension of dividends. although
| undoubtedly the measures taken to ar
range the companys financial affairs arc
drastic. Nevertheless the action consti'
| tutes O wise and courageous policy under
the circumstances. Naturally enough II
INSPIRED inquiry about other cases of new
financing pending or In prospect. but Wal
| Street seemed to see no reason for Dor
rowing imaginary trouble. Tho adjust
| msnt Of the Chesapeake and Ohio situa'
ton certainly removes one matter which
had been disturbing market calculations.
An important event OF the day WAS Of
course President Wilson'S address to Con-
gress on the Panama Canal tolls ques'
ton. For the Presidents impressive com
munication there was nothing but APP
prevail in the financial community. where
IL 10 keenly realized how much the
country's welfare depends on the preser'
walton Of national honor In the eyes OF the
| world At the same time the President't
striking intimation OF the more momen
tous issues OF foreign relations involved
in the disposition Of the canal tolls ques
/ ton suggested one reason why the re-
covery OF financial and business conn
dence has not been sustained at the Jan
uary level. International relationship
/ are In more or less disturbed condition.
just now. a fact which WAS brought hom'
by the accounts Of a revolutionary upris
Ing In Brazil. This would not be sur
| prising outcome OF the Brazilian eco
nomic crisis, which has already had unfor
tunate effects on foreign financial con
ditions. The European securities mar
kets did not have much chance to refiec
brazilian advices, which were received II
Europe rather late.
Routine matters which engaged Wal
Street attention were chiefly comprised
In the news relating to steel trade con
ditions and In the reports OF railroad
earnings Falling volumes Of new bust
ness and weak prices were the points EN-
phasized In comment on the steel in
dustry. The most striking railroad
statement was the report OF the Read
ing Company for January. showing a de
crease OF about 100000 In the com
pany's surplus revenues. The Chesapeak
and Ohio reported a gross gain Of Sls2,
500, net earnings increasing $4,000. Tn