General Motors' Spectacular Rise

A Boston correspondent writes: Bethlehem Steel's amazing market rise has been eclipsed. This week General Motors stock sold at $697 per share, the highest price at which any stock ever has sold on the New York Stock Exchange, with the exception of Northern Pacific. The latter issue sold on one occasion at the record price of $1,000 per share, but this was a forced price during the corner of 1901. The record high price for a stock on the Boston market is held by Calumet and Hecla, which brought $1,000 per share in 1907. The stock market career of General Motors stock has been spectacular in the extreme, surpassing even the rise of Bethlehem Steel. In 1913-14 it sold as low as $25 per share; for many months after the market soared as a result of munition and motor orders, it lagged behind other issues of its class. Even in 1915 it sold for only $82 per share. Then it began to advance under steady buying, and its low point for the present year never went below $405. The advance on September 12th last was an experience to which even old-time traders were unused. The stock rose $52 for the day. Just by way of comparison, Bethlehem Steel, hitherto the premier war stock, gained 24½ points the same day, to 524½, a new high record. Next day General Motors rose $55 per share, to $697, making a gain of $107 for two days, and Bethlehem Steel gained $30¾, to $555, per share, a rise of $55¼ for the two days. The General Motors Company has under way a recapitalisation plan that calls for a 400 per cent stock dividend on the common, equivalent to five shares of non-par value stock for each share of the present capital stock. The preferred issue will be increased 33 and a third per cent by the issue of new 6 per cent preferred shares. The new preferred will he callable at $110 in in 1918. It is stated that the new common stock will represent an earning capacity of better than $30 per share. The unusual advance in the market value of the stock is believed to be a reflection of the public approval of the new plan and of the company's unprecedented earnings. For the year ended July 31st the company earned about $26,000,000 for its common stock, or approximately $160 per share. The year 1917 is expected to surpass this record, for the company should do a gross business in excess of $200,000,000, and have a balance of $35,000,000 for the common issue. This would be equivalent to $212 a share for the present capitalisation, and better than $42 per share on the new common issue. The new shares are selling on the New York Curb, "when, as, and if issued," at from $141 to $143 per share, which, on the basis of the new plan, would mean a price of $705 per share for the present common stock.