New-York tribune., 1901-10-20
fnanrlnI.
The Financial World.

cusslon In the street at this time. the third no.
yet having become prominent as it will Iata~
These are: ID the Northern Pacific situation
90 the copper outlook; C) the extent of our ,or,
eign borrowing. and its probable effects
Public interest would have remained foeussas
the copper situation. to which it had baar
rather abruptly directed by the reduction Of the
Amalgamated dividend, had there not snrun
up during the past week considerable trading
in Northern Pacific preferred stock with sud-
den rise in it's price from below par to above
los AS this stock has been almost as dorman,
the common since the time when the la.,a
was swept from the market. it's unexpected starr
into activity and rapid advance, had the natural
effect of starting eager inquiry and a host of
conjectures as TO the cause
1t was commonly supposed that when Mr.
Morgan. by consent Of all parties, remodeIied thu
Northern Pacific Board. all subjects of disputa
between the Union Pacific and " P interests
We're settled 1t is now evident they were nor
1t is evident. also. that they must be- if another
and very disturbing contest is to be avoided.
and it would appear as if the return of Mr. Hill
to New-York had been followed by a rigorous
stirring up of the slumbering elements of dis
pute
1t is stated that the crux of the whole matter
is the disposition of the Northern Pacific pre-
ferred stock. This is another way Of saying thar
the point in dispute is. who shall control the
property? 1t comes to that straight. For thi,
reason: out of total of 155 millions of com.
bined common and preferred Northern Pacific
stock. the Union Pacific owns IS millions being
a majority This fact is not now disputed bv
any one. The Morgan interests own a certain
amount of preferred, and Il millions of the CON-
mon. They therefore have a majority of the
common.
Now in the ordinary way. the holders OF the
IS millions would have indisputable control
seeing that both issues of stock have equal
voting power. But in this special case there Is
power reserved to the Northern Pacific Companv
to retire the preferred stock at par on any lst
day of January up the year 1916. If there
fore, the preferred stock should be retired in
January next. the UnioL Pacific Company would
be left only with it's minority holdings Of the
common. and control of the property would
remain with the Morgan party as majority
holders.
So, as said above, the question Of the dis
position Of the preferred stock, is the question
which party shall control? The furious stock
market contest of last Spring left it undecided
These conceded facts. however throw little
light on the causes of the sudden buvins ~
Northern Pacific preferred stock the past week
or In whose interest the buying was done A
very high authority estimates that there ara
about % millions of this stock still Ioosa
available for market purposes. When the price
had run up, rumors innunaerable circulated
One of these was that an agreement had been
reached by which the preferred was 10 be re-
tired, and all who did not choose to take cash
at par, would have the privilege Of taking 12O
In a per cent bond. 1t is possible such a
scheme had been suggested. and people who
knew ii made haste to buy the stock. thus
rushing IL up The quotations almost as quick
ly fell back several points. The closing figure
yesterday was 1O5
These fluctuations tell nothing for or against
the truth of the rumored bond scheme II NAV
have been proposed. and not favorably received
II may also be that while the Union Pacific
people may not object 10 the retirement Of the
preferred stock, il will be found that much OF
the % millions of it which was loose have gone
10 people who will strenuously object TO a re-
tirement except on their own terms. There is
nothing yet TO show whether the weeks buying
OF the stock was done because settlement has
virtually been reached, or whether it was done
to strengthen the position of one Of the con-
tending parties. 1t is assumed, as a matter Of
course. that negotiations for a settlement have
been proceeding. There is no reason to doubt
this
One point only remains Why. it may be
retire the preferred anyhow. if the company has
the right to do it? What reason is there for
negotiating a settlement? Simply because there
is enough material for legal dispute in the af-
fair to hang up the whole business until the
L. s Supreme Court should decide it, about five
years from now.
In respect to the copper outlook. IL seems as
if recent buying of AmaIgamated stock had
come from inside quarters. II was said yester-
day that a large short interest in il had become
alarmed by these evidences Of a turn coming
and that the quick and large buying which ran
the stock up to GA rise of three points for the
day-was mainly to cover shorts. IL the stock
is TO be carried up now. we shall hear that the
stock Of copper on hand is not more than enough
for consumptive requirements, and that with
some restriction of output there will be no
necessity for reducing the price of the product
This is obviously safe thing to talk about
for market turn at least; because the asser-
ton does not admit of being put to immediate
test would statement about the volume Of
exports. 1t was useless to deny that there had
been heavy falling off in these; but before It
can be demonstrated whether or not domestic
consumption is large enough to take care OF
production. at 16 cents per pound the market
turn in the stock be made. II may oe
added that the manipulation OF this stock, IN
view of the circumstances under which 1t was
originally presented to the public, is little short
OF a scandal. When a great financial institution
becomes the medium of Offering stock to tne
public. in such way TO assume that the pup
lie will unquestioningly accept its Endorsement
it assumes a moral responsibility which Is not
to be lightly thrown off.
The falling off in copper exports has dlrec'
relation TO the state OF affairs abroad. which s
bad. Germany was our great consumer anu
Germany is in about doleful a state as We