The Minneapolis journal., 1902-08-06
-Es g.
w ALL STREET GUESSES
FORECAST OF COMING EVENTS
Morgan, Vanderbilt and Keene Com
ing HOME Front sEurope-:'st. ~;
~ ,.- Paul. stock.

Special TO- The Journal. - -"
j. New York, Aug. e.=--JJ., Pierpont Morgan,
William K. Vanderbilt # and James i R.
Keene. all powers in the financial world,
it. Is thought that asasoon as they arrive
here. they will shake UP Things in the
stock market. A,tbreker whose name is
not given is quoted aS,.saying: ~.,s7aa = -. 4
Within month. after; the settlement of the
steel suits you will, find, James R. Keene
the old syndicate manager of the steel pool,
and John W. Gates, the new bull ,leade of
Wall street, working side by side for higher
prices in steel issues. :.. v =.
Mr.. Morgan and the HilI!interests will also
take hold of Northern Securities after the
settlement of the Legal difficulties in the way
aud that. issue will mqsf, some points higher.
| The return of, = ME-. Vanderbilt means that
there is something really doing in Manhat-r
tan, and after. he has talked with President
Newman at Paris s,and on the way back to
I this county Central, Manhattan, New York,
New Haven & Hartford and Pennsylvania
will move up. =: .I- ,.az 49, ...gs.~s ~
WHAT'S more, the business conditions war
rant these advances,} and good and growing
business will keep the prices high for months
T ort years after they reach the high water
mark :. as%1@...t~ ~. = @.s..,eS.- :H,,:1
Stock Of the est. Paul" Road.
| The Commercial Advertiser has a4chap-,
ter on the annual report of the Chicago
/ Milwaukee. e st. Paul railway company
After giving the statistics already pub.
/ lished the paper says: ~5>,." '5T : 7te'-:. =
T The report of the company for the year
| ending June, sl901,> showed net earnings ap-
/ plicable to dividends on the stock Of about
| 8 per cent. During the past year the funded
debt; and fixed charges have been reduced
| by the conversion Of bonds into capital stock,
| so that it is reported that the capital stock
is now about s103, 900, 000.~ Last year the fixed
charges were Sc, ,383, 900; which is probably re-
duced to about &c. 600, ,0O0! If the miscellaneous
I income remains constant, the net earnings
applicable to dividends will be about So, ,400,-
! 000, which is 81 per cent on the estimated
| outstanding capital stock of $103, ,OOO, 900. ST.
| Paul's charges for maintenance have been
/ rather high for a number of;years, SO we can
safely add 1000, 900 to the reported earnings
| to arrive at the actual earning capacity of
| the property, which will thus be seen to be
something over 10 per cent on the capital
| stock. - =: ,:.c% .t.,.. 4. .s.-- ..<-->
| At first glance it would naturally: be as
| sumed that so large an increase in earnings
| as shown by St. Paul, especially when this
| Is combined with reduction in fixed charges,
I would tend to increase the rate of earnings
on the common stock. But the conversion
T Of the bonds into common stock in this in
stance is an exception to the general rule
! that a decrease in fixed charges works to- the
advantage of the dividend rate on the stock.
The bonds which are being converted are be-
ing exchanged, because it Is to: the advan-
tage of the bondholders. SO to- do, whereas,
ordinary refundings are put in operation be-
| cause of the benefits which will accure to the
| stockholders of the corporation. The bonds
| which are being exchanged were issued many
years ago, and at that time the st. Paul COM
pany had not developed as large earnings
for Its stock as are being shown at the pres
ent time, so the increased rate Of earnings
for, the stock Is due to the great earning
power of the property and not on account Of
4 the reduction in fixed charges. + - H..
+ The operating department of the st. Paul
company has been very conservative and
Slow to adopt new methods of operation. It
has. retained its old locomotives and cars
and heavier equipment has been supplied only
when the demands Of increased traffic made
the increase absolutely necessary In this
respect the road has a large reserve up its
sleeve. II gross earnings should fall off, the
company could, by; means Of economies now
}practced on most OF the larger systems, re-
duce its operating expenses particularly by
increasing it's train load. With the excellent
. showing as Indicated by the figures reported
with the possibilities of reduced operating ex
penses as mentioned, with the great fnancia
and material development of the territory tha
it serves, there is no question but that thu
st. Paul is in position to maintain continu
ously a high rate Of dividends. a