New-York tribune., 1901-11-17
finanr1ei.
The Financial World.

through tne resolutions OF the Northern Pac;s
Board providing for the retirement of the n-a
ferred stock. there such a rush to reaI;-. :
stock bought in anticipation of the settian,a,.
The whole list dropped The drop was Iar,a.:
in those stocks which had been bought No.
freely Decentralization Pacific being the -.
conspicuous.
In this, however, there is nothing mora ,,
surface speculation. The settlement is a o..
gain; its influence is wholly bullish and it u5r
tend to give a stability to railroad rates AMI
therefore revenues. which they had not before
The market has already started to recover r-,r,
the drop which the realizing rush caused. ana
judicious purchases of stocks at going pr,css
picking out the live things of the market will
return reasonable profits to the purchaser.
1t is beside the question to inquire which side
came out ahead in the controversy It had .o
be settled by compromise. which means that
each side gave up something The Union Pacific
people seem to be content. and there are no sigma
that the Northern Pacific people are other than
satisfied Although Union Pacific stock had the
quickest and largest drop. it must be remern-
bered that it had previously had the largest and
quickest rise, mainly on purchases by a specu-
lative clique made in anticipation of the settle
ment.
The new arrangements put the Union Pacific
in a very strong position giving it joint control
Of the Burlington and also certain protective
powers in the farther Northwest, which were
considered necessary for it. Its .arge holdings
of Northern Pacific preferred will be cashed at
par and one per cent extra; its holdings Of the
common will be turned into the new company at
115; and since to the extent of it's holdings Of
common. it has the right 20 subscribe for the
convertible bonds. which be converted Into
N P. common. and that turned in at 115, 1t Is
that much ahead also
The thing, however, which the o. p
people apparently regard with real satisfaction.
is the securing OF the position Of the company
through joint control OF the Burlington Their
danger lay in this direction, and they have
averted II. They are more confident than ever
as to the investment value Of Union Pacific
stocks. The next dividend will not be increased:
but they say, When we do make the increase,
it will be made to stay"
Apropos Of this, it is well not TO lose sight Of
the enormously valuable asset the Union Pacific
has IN the Southern Pacifc-a road which is in
creasing it's earnings at a phenomenal rate 1t
is stated on authority which is not likely to be
questioned. that the net earnings Of the COM
pany for the September quarter were Just about
s per cent on the stock.
One of the features of the settlement most
frequently discussed is the amount OF money II
will release which is now tied UP. Obviously
the answer to this is, that 1t will release an
amount equivalent 10 the amount Of the North
ern Securities stock which can be sold 10 the
public or very nearly that. year ago, the
capital stock of the Northern Pacific Company
was largely owned by the public. Suddenly u
was swept into the possession OF two sets OF
large capitalists. who searched the markets OF
the world for il. Companies might nominaly
own it. but the real owners were the respective
-.
to make the purchases. 1t is these mems money
which will be released. 1t may be added also.
that through the operation of the Securities
Coupanv. Great Northern stock will probably
be more widely distributed than it has been
heretofore. -,
A public market must be made for the secrrf-
ties stock for there can be no real releasing
until this is done: and on the face OF II, IT woud
seem that the big capitalists must continue 10
work earnestly on the bull side because OF TINS
condition OF affairs The Job is a long one, now
ever: and the doing Of 1t does not by any means
imply a bull movement every day in the week
There is one trouble which commission houses
will probably encounter in handling Northern
Securities stock. 1t represents three STOCKS IN
one-Great Northern. Northern Pacific preferred
and Northern Pacific common. II you SEND 10
the bank loan made up Of, say, 100 ST. Paul.
~. r
Northern and 100 y. P. preferred. ii will GO
Rrt send it in the shape of 100 ST Paul, IVo
Pennsylvania. and 500 y. S, and the average
hank cashier is likely to send it back with the
message: There is too much N S in this ioah-
Please substitute" This will distinctly pe an
obstacle in the way of marketing y. :. sloeA'
and il will take time 10 overcome IL
Holding companies being the order OF tnz
day a new one TO hold all the ci'y :.
stocks was exploited The recent advance .
the prices of these stocks was cited as pIo0-'
It proves nothing one way or the otheE- 1"''
have all been higher. and considerably hlSNT-'
at times when no holding company was lNoue
OF 4 good sized short interest in them has naU
something TO do with the rise There IS away
a more or less lively clique working in BrooA-
1rr uetropolitan. it is stated. is about 10 issue
ten millions of new stock. which II Is r"ii,O-s ~
will he offered at 1J0. II is necessary 10 nav
the stock outstanding at as high ngure 3S "
CON he worked I'D TO in the market. 10 make lN7
subscription a success
The reasons for the advance III MdLli"
we're referred 10 in this column last
Within few weeks the electrical opeTatioH
the roads will start. beginning on the oe
Avenue The calculations of the engineers a
the experience with the electrical operaliOn y
the elevated road in Chicago, Justnes '"e
notation that when the whole system Is W.
ing under electricity. the earnings OF 'he 20 20
will be / to S per cent on the stock As -
as experience demonstrates these eaicui&''O ~
to he correct the nimble spectators VII. -
wait for the earnings to be actually maze - =
will have the stock UP between 100 ana i'V
anticipation of them.
Liberal buying Of the Reading issues "a
feature of the market when the geheral i7
about at its weakest, and II continued
+bo market was strong. II is asserted