New-York tribune., 1901-04-21
financial.
The Financial World.

seems as il Europe and America were franticau
buying securities; and 1t goes without savi,.
that even bold men occasionally get scared !,
the look of things They shake their head.
doubtfully, nurmur something about wild .pec,,
lation. ana wonder where II will end. rner~ -
reason for this But there is also somsthin,
of weight to be said on the other side IWb.n
great companies. headed by the most pronnent
flnanciers and railroad men. are willing to tax.
a stock like Burlington. officially stamp 1t as
worth 200 and put their corporate guarantees
upon it at that hgure-it logically raises the
level at which all other railroad properties nust
be valued. A new standard is established Liks
things must be measured by that standard and
the security market is readjustng itself 10 the
measure established by the Burlington pur-
chase.
1t must be borne in mind in respect 10 this
affair. that it was not an epheneral and COM
petitive buying which set 200 the price OF
Burlington. That the price fixed by the
large holders of the stock. at nothing below
which would they consent to part with control
OF the property although at that time the mar
ket quotation for the stock more than
140 From this position they never budsed
The negotiations heightened out over the form
of payment; but there never was a moments
wavering about the price TO be paid The men,
then who had done most to build up the Bur
linston property and knew 1T thoroughly. de-
Iberately refused to part with IL at less than 90
points above the then quoted market price. and
the purchasers finally paid them that price.
believing that they could pay it and yet And
profit in the transaction. There could not there
fore have very we'll been a purchase and sale
I'm it's circumstances more fitted 10 establish =
standard of price for other like properties.
One error the purchasers made was in prac-
ticallv procIaiming the world that they were
going to buy the property This set everybody
else TO buying. and prevented the purchasers
from picking up in the open market at connpara-
lively moderate prices such stock as was there
for sale Compared with this. the purchase Of
the B. & o. by the Pennsylvania. and Of the
Southern Pacific by the Union Pacific was ef-
fected quickly and secretly.
AS we have now a sort Of official price Of 200
for Burlington. payment to be made in per
cent bonds the question arises what by this
standard of price are other leading railroad
stocks worth? What. for example. is Pennsyl-
vania worth,-the greatest money Garner Of the
Eastern trunk lines? Or New York Central, the
next to it? What is ST. Paul worth or Atchison?
Or if we go to municipal properties what is q
stock like Metropolitan worth. having monop-
oily of the street traffic of New York? Every
one must answer these questions for himself:
but it is demonstrable that the general level Of
market value for ALL has been appreciably raised
by this great Burlington contract.
That since the completion of the contract Bur-
lington Northern Pacific and the Fries have
shown some reactionary tendency. is only the
customary experience With the completion Of
the anticipated thing. the general speculative
buying slacks off, and seeks other objects.
1t is likely to find one in st. Paul In this COL
urnn. on the 31st ut.. 1t was noted that with the
completion of the Burlington deal. the st. Paul
Is left out: but the st. Paul is a great property
and there may be other plans for IT." This was
in a sense. a semi official announcement. 1t was
also noted that recent buying of the stock indi-
Gated coming advance in il. There We're in
deed other plans for the ST. Paul. not matured
probably at the time the above lines were writ
ten. but sufficiently outlined TO determine their
general features This column has informa-
tion now as TO what the plans are A variety
of runors a1oat. IN which leases. bond con-
versions. purchases of control extension Of lines
to the Pacific. and other things figure. Any. or
all of them. of them. may be true.
far as our present information goes: but this at
least may be absolutely depended upon-that
something is in contemplation by the controlling
interests in the ST. Paul company calculated TO
make the stock sell much higher even than its
highest quotation of yesterday. when 1t rose
eight points to no. from it's closing quotation
of the day before.
II may perhaps be recalled to mind that fol-
lowing the failure of the Morgan Hill negotia-
tion to secure control OF the St. Paul a variety
of significant statements sent out the
Wall Street slips from ST. Paul sources. such
that stockholders would have no reason 10
gret the failure of the negotiations, that they
would be we'll pleased in short time TO remain
where they were; and other remarks TO the
same effect. The management virtually pledged
itself by its action in rejecting Mr. Morgans
proposals. to do as much for the stockholders Of
the company as Mr.. Morgan would have done
This pledge must be lived up to; and the plans
whatever they may be. sufficiently advanced
TO redeem the pledge. The earnings OF the road.
it should be noted. are running at the rate of s5
per cent on both classes OF stock. One OF the
many rumors in circulation was that the big
buying OF Union Pacific, which carried il over
par was connected with the ST. Paul affair.
The buying of Rock Island stock is credited
10 the Moore brothers. who having got then
money from the United States Steel Corporation,
road magnates.
In respect to the Southwestern stocks. Atchi-
son easily takes first place. The dividend TO be
declared next month will be, so far We can
find. 11a per cent. The stock has been up to a.
and was close to that figure yesterday The
buying which carried II there was enormous
The Street has it, and every time there Is
strong buying movement in Atchison IL has the
same thing that Pennsylvania interests are
back of it, This time II is reported that Penn
sylvania interests will soon be represented IN
the Atchison board. There runnors also OF a
Southwestern combination. centring around the
Missouri Pacific. with Wabash connection
which will take in the Texas Pacific and NJ K