The sun. [volume] (New York [N.Y.]) 1833-1916, 1904-09-22
FINANCIAL AND COMMERCIAL.
"WEDNESDAY, Sept. q.

| The strength manifested In the stock
market in the closing hour Of business yes
terday was continued to-day. and the final
prices OF active securities were, as rule,
at advances as large as yesterdays net
declines. The chief sustaining power OF
the upward movement was as was the case
yesterday afternoon, the rise in Union
Pacific common stock; an ancilary force
being, no doubt, the failure Of the frosts
. in the corn belt to extend as far southwark
as was yesterday feared. The frosts that
did occur were the most severe OF the sea
| son, but they were confined, apparently,
| to the Minnesota and Dakota region and
| to the northern part Of the agricultural
| section. Cold weather was predicted by
the Weather Bureau for tonight over
territory somewhat lower in latitude than
J that which the frost last night affected,
and this served to moderate the weakness
Of csrn and wheat in the commodity mar
kets. Practically the only matter talked
about in Wall Street during the day, how
ever, was the strength of the Union Pacific
common shares. Dealings in them fur-
nished disproportionate amount OF the
total number of transactions, and at one
time their price advanced 2N points over
yesterdays close and ~ points from their
yesterdays low figure. The stock retained
nearly all Of this rise. Every speculative
trader had pet theory to account for the
phenomenon The explanation" that was
most frequently heard perhaps, was one to
which currency was given by morning
newspaper, that there was friction in the
Union Pacific board of directors over the
company's dividend policy in the forthoom-
ing year, one party, the so-called Standard
Oil interest, being anxious to increase the
dividend on Union Pacific common to 8 per
cent, while the other, the Hartman party,
was opposed to this. This divergence OF
view was therefore leading to species OF
internal contest for control OF the Union
Pacific property. What is the precise men
tai attitude OF the members of the Union
Pacific directorate on various financial
questions is probably quite inaccurately
known in Wall Street, nor is 1t necessary
that at all times it should be publicly IL
lumined shut there is authority for this state
ment, at least, that SO far there has not been
the slightest lack of harmony among these
gentlemen regarding the, cofnpanys divi-
dend policy and that the inadvisability OF
increasing the dividend on the Union PACING
common shares while there are outstanding
Ss7, $50, 900 of bonds that can be converted
into common stock upon demand is, or
should be, apparent to every intelligent
person. An advance in the Union Pacific's
dividend rate before May /, 1905, the
time at which the convertibility OF the
bonds in question ceases, would result,
of course, in the immediate turning
of these bonds into common stock. SO
that the company would be compelled
to distribute dividends upon 3l8e ,029 900
OF common shares, as against the present
volume of s10s 772 ,9O0 The idea that one
great party Of capitalists is expanding
millions OF dollars in an effort to compel
another party. with whom their business
relations are most closely intertwined, to
distribute the revenues OF the company
in way that would promptly be stamped
by every conservative investor in the coun-
try as wasteful and reckless in the last
degree. should, it seems, need no contra
diction. 1t is much more important that
reference should be made to another theory
purporting to account for the strength
and activity in Union Pacific, which to-day
engaged attention in more serious quarters
than those just described. This was that
a method had been framed and was about
to be made operative OF distributing the
dividends on Northern Securities stock.
The Union Pacific Company, as a large
Northern Securities stockholder, would
of course, benefit by such distribution,
hence the rise in the Union Pacific shares
1t is fact that the managers OF the North
ern Securities Company have long been
extremely anxious to find some way to
pay out to their stockholders the earnings
of the company, which are now accumulat-
ing in the company's treasury, the man
ayers having regard, not for the large
stockholding interests in the company, to
whom the receipt of dividends for the time
being is not a matter of supreme importance.
but to the smaller stockholders, who are
obviously much more concerned. Various
devices to this end have been suggested. One
of them. to which considerable publicity has
been given, was plan Of forming syndi-
cate OF bankers that should advance the
dividends to the stockholders upon proper
assignment of the rights to receive the
same Thought has also been taken of an
application to the United States Supreme
Court for an order modifying the decree
of the court pronouncing the formation Of
the Northern Securities Company illegal,
in such manner that dividends could be
distributed. 1t Is, therefore. important
to state at this time that upon the advice
of counsel these and other proposed methods
of distributing tn, Northern Securities
dividends pending the present litigation
have been definitely rejected. so far as'
these reasons, therefore, are supposed to
account for the rise in Union Pacific COM
mon stock to-day they are decidedly faulty.
According to all competent observers
the largest buyers in the stock market
to-day were the Western Spectators who
Yesterday were the largest sellers. The
volume Of business was decidedly smaller
than yesterdays, and at several periods
notably in the late afternoon, the market
became absolutely dull. Foreign exchange
continued to decline and the money market
was slightly, although veS slightly, easier