New-York tribune., 1905-12-31
The Financial World.

Actually no cause exists for Sucn eHpIeSSioH9
of astonishment run the rounds. Excessive
interest is a legitimate cause Of fear when the
excess is due to reasons that themselves are
periIs; and instances abundant we have had
when money has scared from literal scarcity
begotten by boarding. by apprehension over the
financial standard, involving national IN
tegrity-but nothing of that kind taints the
present situation. Greater crops than ever DE-
fore were raised. bringing the best average
prices ever known. demand the use of Immense
sums for their moving; and coincident with this
normal use of funds is unprecedented business
activity throughout the whole country calling
for larger and larger cash supplies There has
been loss Of mOney-no shrinkage OF any kind
in the circulating medium-but there has been
and is pressure the country's financial centre
leaving less money than usual available for Sc
curity market accommodation. And these con-
ditions-just plain good times cOnditions-are
recognized by Wall Street leaders who are not
mere manipulators. not gamblers. Great IN
terests long steadily accommodating securities,
have proceeded upon knowledge Of the vast
prosperity which the country enjoys. They do
not part with their holdings because temporarily
taxed even heavily call loans, for they can
pay such tax with relatively scant inconveni-
ence, with no real loss. Fair critics realize that
the holdings of to-day have been acquired at a
price average far below present quOtations-an
showing substantial prOhts-and never were
American securities concentrated in intei-
gent and powerful ownership.
Such abnormal rates as have prevailed the
last few days cannot in the nature of things he
maintained. Were that possible New-York
would become the money lenders Paradise. All
the funds of the world would forthwith rush
here. 1t is absurd that such wild huctuation in
rates should be possible-should be permitted
for practical finance can provide effective REM
Cdy. 1t is not thinka ole that fantastic per-
formance of the sort could happen In London.
All else beside. fact stands boldly out
the owners of securities are perfectly satisfied
to keep their possessions. they are no longer 10
be affrighted by temporary money hurrles or
any other cause not based on actual adverse
developments And Of adverse developments
there is not one.
Not merely does this current record show that
the American investor is sensibIy seasoned by
experience that he no longer is disposed to shy
at every strutting bugaboo-it shows that the
American investor has become a considerer OF
value and a measurer of it. Impressive have
been the lessons Of the last half dozen years
properties then apparently hopelessly entangled
lifted now not merely into life and prosperity
but disclosing vigorous profit expansion far
and away beyond what any ultra enthusiast
ever dared dream. Take Union Pacific as e@-
ample Forced through bankruptcy, sharehold- .
ers levied upon for cash assessments and other
sacrifices, the property develops into llnpor
which gives it practically premier sltuatlon
among the railroads Of the West This results
not from accident; 1t represents soiiIetIiIA9
more than thrift of careful management-il re-
fleets within it's own boundaries what comes "
ma SO In actual national betterment Union Pa
cihc-taken merely for representative e1emp@H+ @
hcation-becones strong, expanding LuslLtS S.
prosperous, is a mere index OF the GoUIloIy y
strength the country's expansion the couh-
trv's towering prosperity. AS with the Union
Pacific 50 with practically every heaILhIuI PROV
erty Railway progress 6 TaH"3y 1yoEess Of the
ccuntry'a affluence. The railroads are Only
keeping in step. Clear eyed observers recosnIz1 z
ing this do not feel called upon 10 20 LaE 70
seeL explanation and warrant for the better HlAE-
ket values which 1905 registers. What sucn o.
servers similarly understand indeed. Is thaS the
1o15 high level seems but to be fair prophecy
Of coming records still more spiendid.
We approach a new year unhandieappeo-
Conspicuous among the developments Of tns
year is the absolutely astounding achievement
OF the United States Steel Corporation At the
close of 1904 pessimism was still rampant re-
garding the steel business Predictions were the
fashion that the dividend the preferred stock
could not be maintained, and the entire bear
party was busy selling the Steel stocks ON
December 81, 1904 Steel common closed at 81
and Steel preferred at 91Ts. At that time 1t was
insisted in this review that the outlook for the
steel business amply guaranteed the preferred
dividend and, further. that it was evident that
steel trade conditions were in process OF stlli
further splendid improvement
Most sanguine expectations have been more
than fulfilled Month by month steel produc-
ton has Increased. prices have been maintained
and profits Of hitherto unequalled proportion
have been earned The most gloomy pessimist
can no longer with any plauSibilty argue tnaL
preferred dividends in any danger. Ihe
C,orporation-under the master guidance or
George w Perkins, Eibert H. Gary Henry g
Frfck and their active aSsOciateS-haS demon
strated it's ability TO earn and pay those dlVld-
ends through times of storm and stress. while
now in times of sunshine they are as well guar
anteed as those of the foremost Of our gilt-edged
railroads.
AS for the common stock it becomes evident
that available earnings are larger than WheA
dividends were being paid upon it. There can
be no criticism of the wisdom Of the policy
which passed common stock dividends when the
outlook was dubious-that was conservative
and commendable. And there can be no queS-
whenever the Corporation may deem it adyis-
able Bearing upon this point is this statement
of Mr. Carnegie: I'VE are on good business
basis now.
Marketwise it would seem certain that great
improvement will show I'm United States Stee!
shares The preferred a tried and proved
per cent. dividend payer ought TO sell up 20
fair parity with kindred revenue yielderS. The
common, as a speculative proposition, has possi-
bilities in il perhaps superior to any present
non-dividend payer traded in If Steel earnings
continue to increase in 1906 in the same ratio
as 1905 a year hence will see a surplus war
ranting common dividends equal to If not greater
even than preferred dividends
In the years yecords are accomplishments
tremendously farreaching in upbuilding conse-
quence Phenomenal developments those
which rank with the revolution that has