New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1904-06-20
THE WEEK IN WALL STREET.


talkee Of Net changes in quotations showed
NOE gains than losses and predictions OF fur
thor improvement were made in conservative
market quarters Stocks have enjoyed mocer-
ate advance IN the last ten days but the snort
Interest has rot been materially reduced and
acccrdins 10 prominent traders on that SIDE OF
he market the bear account will not be elm
mated until it is possible TO cover at a inuch
lower price level or until active bull operations
conuel hasty retreat Of the shorts. Consid-
erin- the comparative cheapness Of stocks and
the absence OF panicky conditions in the bust
ness situation the long side OF the market ought
TO prove safer than the short side especially as
:here have been so many months Of declining
values without an accompanying loss in the ac>
+ual worth Of investment issues The decline
thst has taken place in the last year more than
measures the reaction in the countrys indus
tries and II would seem extremely unwise TO
continue 10 sell stocks on the theory that condl-
lions n the business world warrant further
loss in quotations. And sales made on the
theory that industrial activity win continue to
contract ought TO prove Improbable. AS a
matter OF fact the outlook in the American IN
dustrtaI world is much brighter at present than
it was a few months ago, and II this seasons
crops are normal there viii be no cause for dis
content among business men, despite the bug
bear OF g Presidential election.
There IS every reason at tle moment 10 GA
pect bountiful harvest this year in the spring
wheat and corn sections Of the country, while
from all indications the cotton harvest viii be
one OF the largest on record OF course, II is too
early 10 say that the years results IN agricult-
ure VIII turn out according TO current condi-
lions, as unfavorable weather in the rest OF the
summer would cause great damage TO the vari-
Gus crops, but It IS a great satisfaction. never
thaless, to know that present conditions indicate
a favorable yield In cotton there has appeared
50 far less than the usual amount OF injury from
insects and the elements. while the reports as 10
acreage show a most gratifying increase as
compared with last year. A big cotton crop viii
have material effect the oountry's cotton
goods and export trades, while It viii prevent a
repetition OF the disastrous bull speculation in
the staple that has been such a harmful factor
in the last nine months. II is not believed that
eight cent cotton Will be seen for a long time,
but It is not likely that there viii be return
TO the Sully level unless the greater part OF the
new crop should be destroyed Even with a
large crop the demand ought TO be heavy enough
10 maintain cotton in the neighborhood Of 10
cents, ct least. In the country's general in
dustrias the tone is healthful, although there is
no important activity when comparison is made
with last year and the year before. That a
large volume of business is being done, however,
in many lines is reflected in railroad earnings,
which show up exceedingly well in comparison
with most years, while in some cases gains are
presented over the record breaking figures Of
1908 and 1902. It may be depressing for the
pessinists to see evidence Of sound conditions in
trade and finance IN place Of the predicted panic.
but il is extremely encouraging for the believers
in the prosperity Of America 10 note situation
that has few elements Of weakness
The reduction IN the dividend the pre-
ferred stock Of the Lake Erie and Western
should not be taken as an indication of a gem
eral change in dividend rates among the Amerl-
can railroads The company named suffered Sc
Nerely in the last winter from storms which tied
up its traffic. and. as a consequence, the earn
ings Of the road were materially affected. net
earnings for the June quarter showing a de-
crease Of nearly 80 per cent, as compared with
the same time IN the preceding year Not being
i'm as strong financial condition as the larger
Vanderbilt companies. which also suffered ia
earnings as a result OF The hard winter. the d.
Tectors Of the Lake Erie and Western acted
wisely in discontinung dividend rate which
was not earned. Earnings Of the New York
Central for the June quarter showed a surplus
after all charges and dividend Of $4,000 com
pared with SOL 000 81 the corresponding time I'm
1903 while for the gear ended June 80 June
earnings estimated in parD surplus after
charges and dividend amounted TO S76l 600
against S2.120,OOo Ia The preceding year. Lake
Shore for the June quarter showed a decrease in
surplus OF S,S33.u0O and q loss in net earnings
II S605,0O0. The latter loss was due TO a large
expansion in operating expenses. or the Van
derbt roads the heaviest loss in gross earnings
in the last six months was suffered 10y Michigan
Central, which reported a decline Of 81. O9S 6U4.
its surplus after dividend amounted TO only
Sl0,240 compared with S237,7J2 a year ago
Current indications in the railroad world sug-
q much bprfpr in |a III
Ct the year than in the first half especially If
the crops turn out well
OF the interesting DEVELOPMENTS IN the week
the announcement by tho Southern Pacific di-
"ectors Of their intention 10 ask the stockhoId-
ers TO authorize an issue Of $1Gt00O0O0 per
cent preferred stock was Of course the most i'm
portant. Naturally, Wall Street was not at first
favorably impressed with the idea of an increase
In The company's capital, but when 1t became
known that OF the amount to be authorized only
100000 would be issued, and the proceeds of
the sale would be used 10 llqudate the com
pany's floating debt and provide the road with
additional working capital. sentiment regarding
The proposed financing improved and in some
quarters there was a disposition TO accumulate
Southern Pacific securities. The new preferred
stock viii be convertible into common. and il
will be subject to redemption At a price of 10
any time between 1905 and 1910 In Kew of the
fact that the company's floating debt IS a charge
ahead Of dividends. the criticism that the issue
OF preferred stock win compel long postpone
inert Of dividends on the common stock carries
little weight. and it ought not to be az effective
factor in influencing sales of the present South
ern Pacific securities. The payment Of the float
ing debt through the medium CT preferred
stock issue certainly ought TO Improve the credit
Of the company. Southern Pacific is controlled
10y Union Pacific. and Union Pacific is in the