New-York tribune., 1901-05-19
financial.
The Financial World.


than might have been expected in the same
time. and which seems sure of progressing far
ther the coHning week.
There was the usual second relapse after the
rebound from TIE great smash 1t came last
Tuesday, and was caused by the liquidation OF
some largs western accounts which had been
carried through the panic. For a couple 90
hours things a bad lcok. the fan Of prices
from the opening figures Of the cay being nm
pleasantly large ard rapid. Two panics do no,
follow each other. however The material for
second on the heels of the first does not exist
The first has 81 largely exhausted it, that thu
relapse from the first rebound has only the Ieft
over material frcm the original smash to work
on. SO Tuesday. after a couple of hours or
liquidation. there wss rapid recovery; and since
then the market has bsen improving. being
much helped yesterday by what was generally
considered a sood bank statement.
Things which shake Wall Street the mos.
severely ere those which occur unexpectedly
and nothing could be more unexpected than the
Northern Pacific corner. There never was
corner like II IN any market of the world before:
hut now that it has occurred. il warns US tha.
in these days of vast increase of wealth and az
gyesations Of corporate capital We can no longer
look upon al eighty million stock as safe frorl
such operations. When stocks os this magnI-
tu6e were frat created-az1 it is a comparative
~ new thing with Us-they were the standing
subject cf Jokes about giving everybody enouc;,
to sc round. ard insurance against corner
frF- There is m joke in it now Probably in
time it viii te possi5Ie TO corner the eleven
hundred Millions OF the United States Steel Com
pany.
The way to a lasting peace is always through
war. The more severe and wasting the war
the longer the peace which follows IT, This
Northern Pacific fight. which convulsed the mar
kets of two worlds. and threatened widespread
bankruptcy in both will have IN outcome in
which the Community of interest idea will be
put into practice with thoroushness. There ia
only one way out OF the tangle. All parties to
the fight will come. and in ia. are already
moving that way. TO a general agreement en-
bracing a comprehensive plan Of union. watch
will take in all the roads between Chicago and
the Pacific Coast. This does not imply that
they will be formally consolidated. because they
VIII not. But they viii be 50 united by mutual
stock ownership. that each company will have
on it's Board cf Directors the representatives OF
other companies: ard the memories Of the de-
structive effects OF war will operate for mary
long day to keep the peace between them.
The situation Of the principal parties 10 tha
Northern Pacific fight. whom we win call X and
I. is this: There are S0COOO shares % common
stock. OF which Y. ard 7. each hold 50 evenly
divided amount. that il IS still disputed -s.ch
holds the majority. In addition both hold large
amounts Of the preferred 81 *. Neither Y nor
Y. can sell Whichever holds the majority dares
not sell. The minority holder cannot-because
his holdings are so large that they could only
Re marketed al a runous loss On the purchase
price. Therefore, Northern Pacific stock at this
time is virtually tied up-and already the deal
inss in it in the open market have become
nominal.
1t has been stated. semi officially. that the
purchases of Northern Pacific by the Union Pa
ciic people. were made az the corporate act OF
that company. II must follow. therefore that
the money for the purchase was raised on obIi-
cations Of that company Of some sort or kind.
and that the purchased stock is an asset OF the
corporation The purchases 10 retain control by
the Morgan-Hiu party were made with the
money of individuals and firms. At first sight
II might seem that the Union Pacific people
were in the more secure position because II is
the company which has bought In a case like
this however. the difference is more IN form
than substance. Somebody's money is UP for
the L. P. obligations the security for which is
the Northern Pacific asset. The value Of that
asset is matter of as much concern to them
to the people who put up their money di-
rectly to buy Northern Pacific stock.
It VIII be seen very plainly that the case is
one where all parties must unite in way
or other, because only hy union can they unite
the knots by which they mutually tangled
up. This will be done. There is. perhaps a
little too much personal feeling at this time 10
permit Immediate progress; but Wall Street ami
mosities short lived. There is too much az
stake for indulgence in that sort OF luxury. The
Burlington deal will so through: and all the
lines of the Northwest and Pacific coast will
be aPpOrtioHed into systems, probably three in
number; and the values of the properties will
be raised higher than ever-just as the values
of the Eastern trunk lines have been raised by
the aggregation Of all separate lines into two
great systems.
No stock on the list had greater fall Count
ing out the huke in Delaware and Hudson) than
AtcnisOn common, or has had more rapid re-
covery. When The great break started the stock
was IS it fell headlong. and though the low
est recorded price on the official list is IS. yet
as a matter of fact the stock sold down into the
SOS. Yesterday ii was up 20 So. That the stock
could fall Gs X did, and recover it has. shows
how frantic was the selling in that half hour of
paric. and how powerful the recuperative forces
when 1t was over. The story is again repeated
through the Street that the Pennsylvania is the
dominant power in the company.
II is obvious from the way the market has
acted the past week, that all the great interests
are in line to repair the damages done in the
bis crash 1t is also obvious that the market Is
great deal safer now than it was before the
crash came, The Wild Western speculation has
been eliminated. The enormous earnings Of the
roads continue. The prospects for great crop
year. far they appear thus early in the
season. are most encouraging. The general bust
Of ha ha baaD bu SlighriV