The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-02-07
views of Henry CIews.

Henry CleWs, of New York in reviewing
operations in Wall street last week, says:
One notable phase of the speculative bus
mess is the diversion of operations from the
industrials to railroad stocks. This is the
natural result of the great Improvement in
railroad properties within the last half year.
This class of investments indeed are the
beginnings of a general and permanent i'm
provement in their status, which is calcu-
lated to give them not only higher but al
so more stable value The railroads are
reaping the benefit of the great expansion
of trade that is naturally succeeding the
four years of prostration of business. Those
years have brought them economies in man.
agement, and have introduced a lower range
of prices in all their expenditures, except
for wages. The check upon competition, by
the comparative cessation of construction
of new road, has tended to put a restraint
upon the cutting of rates; and the amalga-
nation of number Of competing lines into
large systems has had the same effect
whist it has materially helped to economiZe
the expenses of management The several
notable examples, within the last twelve
months of railroads exchanging their out
standing bonds for new consolidated issues
bearing 31a to 4 per cent. interest have set
up a precedent which is likely to be very
generally followed by all companies in fair
credit; and il is TO be noted that the general
fall in the rate of interest has made these
operations the more easy and at the same
time gives an increased value to dividend
paying stocks. All this has been foreSeen
by shrewd observers, but it only now is be-
coming apparent to the common eye; and
it's effect is to create a higher appreciation
of this class of securities. How much high
er these tendencies may be expected to car
ry prices do not pretend to say; but 1t is
very safe to predict that, from this time
forward railroad stocks will have IA higher
standing among investors and that their
rl< of stand higher
the standard of past years. This view IS
one of the causes contributing to the pres
ent upward tendency of prices, and its eff
feet is far from having yet been exhausted.
1T is a healthy symptom that intrinsic
considerations like the above are now the
main factors affecting the market. Cuban
affairs are not mentioned. The Chinese
situation. though a very sensitive one with
certain countries holding our securities oc-
cupieS no attention. The position of the
money question in Congress is ignored, and
the Teller resolution has been viewed more
as a matter of politics than of finance, all
OF winch shows the deep interest now taken
in affairs connected with the railroads.
Among the railroad stocks that are now
attracting special attention and strength
ening the tone of the market are Chicago
& Rock Island, St Paul. New York Cen
trail, Union Pacific and Great Northern pre-
ferred, each of which is developing strong
'bull' features. In Rock Island interest is
revived by the expectation that its January
net earnings will show as large a relative
increase as its gross. New York Central
is stronger on the assumption that it's alb
sorption of the Lake Shore road has
become a virtual certainty. and that the
contemplated deal with Michigan Central is
sure of accomplishment. 1t is understood
that the Vanderbilt interest have recently
taken up about 5000 shares. In Union Pa
cihc there has been free selling of the pre-
ferred shares by those who have received
them in the conversion of the money
ceipts under the syndicate arrangements
but all the securities of this company show
unusual activity. The preferred stock of
the Great Northern has advanced freely
under active buying, based on the generally
favorable prospects of the road and the ex-
maximum dividend that be paid on
that issue of stock Baltimore & Ohio has
shown a decided revival of activity and
marked rising tendency due to an under
standing that certain bankers are eXamin-
ing the property with view TO proposing a
rlln1 Of ranroa mi "a ton.