New-York tribune., 1902-05-11
financial.
The Financial World.

The market has shown a tendency to narro-r
and the immediate outlook is for dullness. Tbars
are several things in the way of a general as
vance while the strong UndertOne (which Is oh
servable in London also) gives reasonable as
suTance against break Wait. and be patient
while, seems to be the advice of leading oper-
ators
1t was good testimony that conditions wera
sounder than is sometimes feared. when the
Webb-Meyer smash made so little disturbance
Three failures were successfully announced
within fifteen minutes after the opening Mon
day-something calculated to give shock, for
one can never tell when these things start
where they are going to end Happily it proved
that the speculatiOns which caused these fail
ures were. as it was asserted they were, con-
fined to comparatively narrow circle: and no
other houses went. 1t is known, however that
some were badly hurt. When the market had
rallied from the shock. the strike situation be-
came acute; and all the time there was a pull
on money which kept the rates high Under
such conditions, the market has shown resist
ing power which argues for it considerable
soundness.
The best news is from the West where rains
have been abundant since that warm wave
which caused such a scare. Thunderstorms
followed close on it, and it seemed as though
they broke the drought conditions for the pre-
cipitatiOn since has been very satisfactory. The
cold wave which has just come down on Us
may hurt in some localities but rot much. It.
however caused some hasty selling of Union
Pacific yesterday.
The condition Of the money market seems to
worry most Yesterdays bank statement
showed the reserve to be down TO the lowest
at this season in ten years. II is only little
above the % per cent legal line. Relief is not
in close sight About the first part of May
there is always pull on the bank reserves. but
the pull little harder this year, and the de-
peton larger. The Treasury has swallowed
up some portion. Summer rates" for money
can scarcely be expected before the end OF the
month. Banks and trust companies. meantime
will be disposed to contract loans rather than
expand Some surprise has been expressed that
the high rates have not brought more money
from the West. If they have failed in this re-
spect, it must be because the banks out there
have full employment for their funds. The high
price of every sort and kind of produce calls
for the use Of more money to handle these
products.
In respect TO the labor troubles. the question
is stin whether there is to be a strike or not
The delegates did not want to take the RESPONSE
bility OF ordering one. They have referred the
question back 10 the men, for them to vote on
it on Wednesday merely ordering a suspension
OF work till the vote is taken. 1t is we'll known
that the majority of the men do not want
strike, but a noisy minority may carry the day.
great strike always kills of the leaders o.
thence the reluctance of the leaders TO take
responsibility on themselves. 1t is asserted that
the coal operators are fully prepared for fight
and Indifferent whether it comes or not. There
are no elections pending to get politics mixed up
with It.
Whenever the strike was talked of. the Read
ing issues were watched II they went up.
which they did. there was to be no strike When
they reacted, the situation was doubtful again
4 rapid upward movement in Delaware and
Hudson did not count, it was said to have
relation to the annual meeting this week.
Finally, late Friday afternoon the decision was
given to suspend work-a temporary strike
How would Reading act? II acted yesterday
as il the recent advance OF the stock had been
due in the main to purchases for permanent in
vestment-as If the bulk of the stock bought
had been put away for keeps not TO be brought
out by ephemeral labor troubles If this sur
mise be correct. there is no doubt about the
place Of deposit. 1t has gone into the treasury
of the b. & o.: which rneans-into that OF the
much greater corporation which controls the
B. & Q.
Said eminent banker in discussing the
market the other day: do you know what I
consider the cheapest stock-Pennsylvania The
pressed with the value of that property. Its
treasury assets in book value a hundred
millions. After charging on everything IL earns
between ten and twelve per cent. It's great
property spendidly managed I believe the o.
stock will sell at 1T5 200 this year"
Talk like his. being very rare from that
source. 1T counseled looking up the figures. They
are suggestive. Growing wealth and strong,
prudent management. are shown by them Take
the company's reports for the past seven years
"a period covering national adversely and pros
perity alike. In that time the Pennsylvania
gross earnings have increased from OF 10 101
millions; the net from 10 TO ST millions. II has
spent largely and bought largely in these years.
rounding out its great system by purchasing
control Of connecting roads. The purchase
moneys have been raised mainly by issues Of
it's own stock, at substantial premiums. Bond
issues have been hght-a few millions.
Every year. the dividend fund remaining after
all charges paid. has never been much more
than half dsbursed. When this fund was 10
millions. were paid out: when X rose to l.
millions, less than 8 were paid out: when, last
year. it reached 22 millions less than IL We're
paid out. The surplus has annually gone back
into the property.
Consider specially the figures for the past
three years. wherein the company has largely
increased its stock the money so obtained being
used for the purchase Of the b & O.. the Nor
folk and Western, the Chesapeake and Ohio.
the Long Island. and other roads. In 1899 the
dividend fund $10jOOO00, equal to per
cent 130 millions of stock. Dividend paid.
per cent. calling for SO. 500 OOO-surpIus mill
ions. Year 1900. dividend fund was $17.3OOO0O
equal to II per cent on 146 millions OF stock