The sun., 1903-03-11
FINANCIAL AND COMMERCIAL.
TUESDAY, March I

| FINANCIAL AND COMMERCIAL.
TUESDAY. March 10.
The security market to-day was nervous
| and unsettled, rejecting the confusion II
| the minds Of operators. large and small
over the exact facts Of the money situation
and the outcome of the controversy between
! the majority and minority stockholdinf
interests in the Southern Pacific company
The puzzle regarding the money market
| IL that while on the face OF things the gen
eral bank surplus In this city is down to
it's legal minimum, calculated according
to the existing Clearing House standard
and while the Government continues to
withdraw money from this centre-the SUD
Treasury having taken from the banks on
balance since last Friday, S2,f4,OOo-rates
for the use OF money do not, nevertheless
grow stringent. Heretofore. and notably
last fall, when, superficially, bank resources
here were even greater than they are now
call money rates were quoted at between
10 and 30 per cent, and the utmost un'
easiness over the situation was evinceo
by our leading financiers. To-day no
such uneasness Is felt. call money is lent
plentifuly at 5 and per cent. and money
brokers are in receipt OF kilograms from
nearby cities requesting them TO place mil
lions of dollars on Stock Exchange collateral
at rates a little higher than those just speci-
fled. 1t is impossible TO believe that II
the money market was in a state Of strain
anv such phenomena as these could be
exhibited. II must be accepted as true
that either bank officers are aware that
the bank statement last Saturday repre-
sented the condition Of affairs as much more
grave than it really was or that they are con-
fident Of obtaining what money they want
when il is needed. One reason, at least, for
such confidence is no longer secret. There Is
now no doubt that plenty OF money can be
obtained abroad if our bankers here choose
TO bid for it, and il is equally certain that
large loans Of this kind have already been
negotiated.
The Southern Pacific dispute has now
reached a point where the majority OF
traders feel. very naturally, like with
drawing from the market until the matter
is settled. 1t should, perhaps. be said
at this time and in this place that the as
sumption made in many quarters that this
struggle is merely the effort Of specu-
lative pool TO force the present managers
OF the Southern Pacific Company to pay
dividends upon the shares before II ia wise
and proper to do so is not as powerfully
supported in the financial community
as many people might suppose. 1t is true
that the so-called minority interest In
Southern Pacific consists for the most
part OF a pool in the stock-though by
no means so large a pool as is commonly
estimated-whose holdings, It is believed
were acquired at a price considerably above
that at present quoted for the stock, and
acquired. also, in the belief that dividend
payments upon the Southern Pacific shares
would he begun at an early date. This
fact, however, does not lessen the rights
Of the holders of these shares. or the duties
ethically imposed upon those In control OF
the Southern Pacific Company. II Is ad-
mitted that the money already taken out
of the gross earnings of the Southern Pacific
Company and expended upon improve
ments amounts to s25,OOooOo, and 1t is
understood that the plans for future i'm
provements call for the expenditure OF
as much more. When the entire work
is completed the Southern Pacific Railroad
will undoubtedly be in as fine physical
condition as any railroad in the United
States, and the benefciares Of the fact
will be the stockholders who are then
In existence. The improvements planned
are, In other words, for the benefit
of posterity. and the question at once
presents itself, why these improvements
should be wholly paid for by the
stockholders of the present day and why
no portion OF the expense incurred should
be provided for by bond issue. or in such
a way as to make posterity. as well as the
present, contribute to the cost. 1t Is only
fair to say that those who are now In con-
troll of the Southern Pacific Company
have never refused to recognize the just ice
of this argument. and that last fall they
authorized bond issue for the purpose OF
refunding some Of the existing obligation
of the subordinate lines Of the company
and at the same time for raising a cash
sum for general improvements. II wa'
finally considered however. that inasmuci
a. the Southern Pacific Company is merely
a holding company IL would not be able
TO offer a bond that would be attractive
10 investors. and hence the idea Of a bono
issue was abandoned. The suggestion ha,
now been made that the interests Of al
the Southern Pacific stockholders. ma
joriiy and minority alike. would be prop
crly conserved by the declaration by tbs
company OF stock dividend. that 10
by the issue 90 the stockholders of sIci
| an amount 81 stock as would compensate
them for the money ALREADY sequestrateC
! from the company's gross earnings. Thu
would leave the company free TO go or
! spending money for improvements un
| hamp"red by the necessity Of distributing
/ cash dividends. ana II would not bring ~
/ any ~ the VrN"d questions involved Ia al
/ issue 81 bond- The ANNOUNCEMENT %
/ such action by the southern Pacific iii
! r,r,urs would not, of oour-". ls weloom'
I to thu.r Who have l'-'n active Ia d"pr-ssin,
. The I,rio- 81 thr share, but Il would II n
3 l.rliryrd. h. approved by ry"rybody "ls'
4 The market Sa- Nrak to-day, tat a. u
/ usually th" cas. a. THE stage ui a d.rliulh.
I ulaTkrt. tl,.io ~rr" ~ particular new
d.,elo,,nrui- III" unisyorabl- annuA
J rlaisiu.nt ~ m" American lo' ,"mI.ah az
Na- rlI-st"d ani u ~as murr than 0ns-.,
a. faf az iiir Industrial i,-i Sas runs-TtEd
/ T., iir further adv Nshos ~ IA" Isuo- ~ fay
| ,siptaf ani q tho Fnai sinuhFih - "a,
! Aualganat.d tuwHf -haus hrts ais
/ ~ ri,iss oi ali iis s'.lHHf Ir,aiu.iAs ~iul
I,ai,l,s in utlsf mATk'ts A o,nosttfatss
lHaf attarA saz mad iu tif Sarly iradii,I
4 -