New-York tribune., 1902-04-20
financial.
The Financial World.


been rising since the settlement. and. barring
accidents. they will advance still more the COM
ing week
In last weeks article it pointed out that
control of the Louisville had in all probability
changed hands in favor either of the Southern
road or the Illinois Central Official announce
ment made on Thursday last that control
had been lodged with Mr.. Morgan. OstensibIy
this would mean that the Louisville and the
Southern systems would be worked together.
but in the ultimate development it will prob
ably be found that a community of interest,"
has been established which will make all three
systems work hs-rmouiousIy. This does not OF
itself necessitate holding company.
1t speedily recognized that the railroad
situation of the South vastly improved by
the change of control referred to. A violent out
break of speculative buying in Southern COM
mon stock was the immediate result, which car
ried it up six or seven points to 40 Heavy
realizations caused the price to drop back aosus
as fast as it went up. The stock is now COM
paratively steady around 81, which is perhaps a
little higher than its investment value at this
time. because the earnings of the road at their
normal rate of annual increase, put dividends
yet long way in the distance.
Control of Louisville does not increase the
Southern's traffic. II secures it against rate
wars costly invasons of territory competitive
which cut deeply at times into railroad reve-
nues. In other words. it secures peace and sta
bility for both systems. Growth Of traffic on
each must come from local development 1t
follows. of course. that harmonious relations
with the Illinois Central eliminate danger from
that direction. Hence there has also been an
advance in the price OF the latter stock since
the Louisville settlement was announced
In the arrangements which may be made TO
give permanence tc this desirable situation there
Is possible room for such interference as the
creation OF the Northern Securities Company
evoked-unIess it be proposed to abolish free
dom of contract Mr.. Morgan or the Arm OF
j. P. Morgan & Co, have as much right to buy
Louisville stock wholesale from Mr.. Gates and
his friends, Mr.. Gates had to buy the stock
retail from whoever had it to sell Denial of
the right to buy must carry with it denial Of
the right TO sell.
Alarmist articles have been written to the es-
feet that other companies subject to Just
such operations that which transferred con-
troll OF LouisvilIe-as if this were something
awful. They certainly subject. and ought
to be- No Of shares is obliged to sell;
but if he does want to SELL is it proposed to
forbid him? In this particular instance, il de-
veloped that the Louisville directors had so far
chosen sell. that they could not scare up
$4,000 share~ Of stock among the whole board
they were bare OF the stock. Of the company
which they managed: and Street runOr is that
some had gone short their individual ac-
count Yet the people who had bought their
stock are ''unscrupulous specUlators'-for dar-
ing TO buy IL, apparently.
II is alleged that these same INSCRIPTIONS
spectators bought stock on discovering that
the chairman OF the Board had sold stock he
could not deliver and started their operations
in an effort TO squeeze him II was their right
to do this If they did start, but is it true?
The evidence is the other way. On Friday, the
4th inst, it was current gossip in the Street.
and was mentioned in commission house let
ters that large lot Of Louisville treasury stock
had been sold that day the strength Of the
general market On the following Monday. the
1th inst the company made formal announce
ment that it would issue five millions Of new
stock. How could it be known on the 4th inst
that treasury stock had been sold, unless those
who bought it had previously cleared the mar
ket of all floating stock obtainable at the then
prevailing prices? Because of this they were
able to instantly detect the source from which
the unexpected deIuse was poured on them.
And what shall be said Of the ability Of the
financial head of an important railroad COM
pany. who sells 30 900 shares short without the
slightest precaution against the risks involved,
and later makes public proclamation OF his folly
by begging the Stock Exchange TO suspend a
rule expressly enacted TO prevent such sales!
1t was about time for control Of Louisville to
change So far from there being anything
alarming in it, it is the other way. long step
has been taken in securing permanent staoh-
ity 10 the railroad situation in the South. WHICH
helps the stocks directly involved and the mar
ket generally.
Much is hoped for the bull side from the pei
ter state of affairs in Europe. The volume OF
subscriptions for the new British loan Snow
that there is a plethora Of money there ready
for investment. The revival Of speculation Oi
a large scale has already begun, with the sure
end of the South African war IN sight II VIII
probably Iinger some time longer. because some
of the commands will vote 10 give up anu
others to stay out: but when even the moS'
irreconcfIabIe of the Boer leaders are ready 20
talk peace TO their followers. there is not hlucH
left Those whose business makes them az
quainted with South African wants ahll' ''Pa'7
a large and immediate increase OF trade Ine,'
but they also believe that the effect On OA0
home markets will be still more striking. IheS
look for a rampant London market
The indications for the coming week are IOi
considerable activity. The Western eonunsen'
are all working hard on the bull side ana .N9le
IS no force in the market arrayed against 'ie
The large buying of Union Pacific is known -
be done mainly by them. and suostdl''.''
higher prices are predicted for the stock before
the end of the week.
When the market opened yesterday morning.
Mr. Gates was asked for an opinion Hels
is :, he replied II have cabIed to London tha'
Ct PauI. Illinois Central and Union Pacific are
the stocks to buy. They are going nucn
higher" CtIanr-i@A