St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1894-04-29
STOCK OF STREET CAR. COMPANIES,
IT'S rurcnase and Sale Now a Prominent
Feature of Wall Street. II

No financial feature on Wall street has be.
come more prominent of late years than THAI
connected with the purchase and operation
of street car roads and systems. Ten years
ago banking houses had comparatively little :
to do with street car stocks. There were a
few firms that bought and sold the shares Of
the old horse car lines whenever there haps,
pened to be market for the same. But they
made no effort to push these stocks. In,
fact, they rather regarded investments in that
line as precarious, and dealings in the stocks
as waste of time. >Sr sssaz- vel
To-day you can buy or sell the shares Of
the street car lines of all the great cities on
Wall street. There are houses that do little
else but conduct transactions in these enter
prises. The leading newspapers, both daily
and financial publish lists of quotations Of i.
these roads. The bankers do not conf1na
themselves to the lines in New York and
Brooklyn. You can operate in the shares ei
horse and electric and cable lines in Newark
Philadelphia, Chicago, Boston, BALTIMORE !.
Syracuse, Albany and Buffalo. One banking &.
house even puts Milwaukee on its list and
deals in the shares Of the street cor lines in :,
that Western city. s45g-.. .a.su5,Y5
Nor is it an Improbable business Since
the Philadelphia syndicate was formed and
took over the roads in the Quaker City and.
then formed the Metropolitan Traction Come
pany in New York the demand on the part Of
investors for the bonds and stocks of SUCH
enterprises has materially increased The
fact crept out that the average street car line.
was very paying concern. 1t appeared that
the lucky investor who got in on the ground
floor when these lines were first built had
reaped fortune. They paid S25 or $50 a
share for the stock at its inception, and after
getting substantial dividends for years found,
they could sell the same original shares for
$500 to $500 share. In many cases pur-
chasers bought stock when the company that
built it was organized out of patriotic mo-,
tives. They wanted to see line in their
town or in the part of the city in which they,
resided. They placed the certificates in their
safe deposit vaults as sort of relic to be
scrutinized by the next generation as sam
pie of the worthy citizen and his public
spirit. +
Gradually the town grew or the section Of,
the city increased wonderfully in populationss
The line began to pay. One day the public
spirited citizen, who sacrificed himself for
the interest of his fellow men, received notice.
that dividend would be paid. He attended.
the regular meeting of the stockholders and &
learned how promising the infant project had
become. There was talk of extending the
road. The town or municipal authorities :
were to be asked to grant an additional fran
chise. The patriotic stakeholder felt pleased. =
He understood how much more gratifying
profit is than patriotism. The days ran along
along and he was offered par for his stockA
He declined the offer with dignity. He had
bought the stock not as an investment but
from sense of duty. He did not care to
sell. He wanted to keep his certificate as a.
sort of souvenir Before he was aware another
dividend and a larger one was. declared
While there Was little market for the stock
because, as the directors explained, there
was no stock on the market, the worthy citi-
zen heard now and then Of sales at prices
considerably above par. va II
Ii the investor were lucky enough to hold,
on to his stock still longer he began to hear)
OF the great success of the cable and then of,
trolley lines. Old horse car lines were turned.
into electric systems. Sometimes the Stock,
holders subscribed the necessary capital and :
converted the slow horse road into rapid
transit road. In other cases outsiders came
ting control of the line, equipped it with elec.'
trlclty. About this time the story of the syna
dictate appeared in the newspapers. A colec.,
ton of capitalists were in search of fairly
prosperous roads in growing and thrivinG
cities. Then came the promoter in quest of
options. He asked tho worthy citizen to give
him an option on his stock for a few months
at figure that seemed fabulous. Frequently
the patriot overlooked his original Intentions.
He concluded to dispose of his souvenirs.t
After all, he argued, it would be better for his
children to have cash than mementoes Veryi
likely he would live so long anyhow thai s,
something would have to be done with his
shares. He had done his duty in the prem
; ises, and he felt he recognized his duty at
the conclusion. So he granted the option. If
the promoter was smart he unloaded the con-
trolling interest that he had under option to
syndicate, and one day the unselfsh patriot
disposed of the stock for several hundred
dollars a share that originally cost him TWEEN.
ty-fve or fifty. III
The moment the new owners stepped in
they increased the capital stock of the former (
corporation and began using new bonds. In &
many cases the stock was listed on the local
exchange. Dealings in the shares became
frequent and active. Then, of course the1
banker appeared. So long as the road was a.
horse concern and the stock was closely he,d:f
he took no interest in it. Now that it was an
electric line and the shares were in demand
he came along to boom it and create specula-'
ton in it. He formed a new channel for the
making of commissions and it didn't take
him long to avail himself OF the opportunity
This is how Wall street got into the street
car business. Big banking houses SOON
branched out. They not only bought and
sold the stock, but they provided capital for
purchasers of profitable roads. They SUBJ
scribed for tissues. OF street car bonds and
foated them at a neat advance among their
customers. They advertised that they made
speciality of such investments. They gave
heed to the respectable and reputable pro-
moter who offered them chances to buy up
road. 1t isn't necessary to enumerate the
banking concerns particularly engaged in this
department of modern finance 1t would
probably be hard to find house of high
standing that hasn't taken hand in one OF
these enterprises and isn't to-day concerned
in the welfare and prospects of surface roads! 1i
as they are termed in distinction from rail-
road and elevated lines, in various portions 81
of the country. Many banking institutions
act as trustees or fiscal agents for big traction
and electric companies. They place their
bonds for tham and coo fbat tba;,, c+ooy, 1oo-