New-York tribune., 1905-06-25
The Financial World.

Of sentimental adverse influences Diminished b..
fore the significant fact Of the increased divf-
dend Reading placing that stock upon "a
per cent basis Here is direct evidence OF pros
porous railroad conditions azding srP-ass'n
In conservative distribution Of profits 70 share
hoiders-conservative because per cent On
Reading common is less than one-half of the
available yearly surplus. Effect Tnarketwiss
instantly stimulating; there swift rec
ognition that II Reading could see its way clear
to raise it's dividend other companies working
under similar conditions and enjoying similar
prosperity might be counted upon to take SIM
liar action. All the Pennsylvania group. for
example become very strong; and predictions
are freely made that Baltimore & Ohio and NorL
folk K Western will speedily follow the Read
ing example. Conditions warranting increased
dividends are not confined to eastern and SOUTH
erH roads. 1t is confidently asserted In well In
formed quarters that Union Pacific viii do bet.
ter by shareholders it's next dividend dec
laTatien--whieh is due some four five weeks
hence-and there is talk of an early Southern
Pacific dividend which Is entirely warranted By
the roads earnings. Beyond doubt, we are en-
tering upon an enlarged dividend peFied-the
direct result of the economies of past years and
the lavish disbursement of earnings for Con-
struetion, betterment and equipment The Amer
ican policy will be found to have been wise
healthful, and In its outcome far better for
shareholders than If the English policy had
been pursued of distributing earnings as fast
as accumulated,
Bearing on this matter of dividends. Just note
these significant figures taken from the latest
report of the Interstate Commerce Commission
comparing dividend statistics of 1897 and
1903-fscal years. Full details for 1904 preferred
to later) are not yet available These figures
show railroad dividends only:
Dividends paid In 1897, sS7110599
Dividends paid in 1908. ............ 196T2S176
Increase .S1096l7577
In the six year period under review it viii be
seen that in amount actually distributed divi-
dends increased 125 per eent-surely a remark
able showing.
The amount of railroad capital stock on which
dividends were paid compares for the two Pc
rfods thus
Stock paying dividends in 1897. 81. COS, ,54s9Ts
Stock paying dividends in 1903.. 3.4J0. 1915
Increase e......................S 81, ,S47, ,1ST Se1
Here is an Increase OF railroad stocks paying
dividends of 115 per cent. OF all railroad stocks
outstanding but 2990 per cent were paying
dividends in 1897. compared with 5000 per cent
| in 1903 an increase of over 81 per cent
Preliminary figures for the fiscal year ended
June 80 1904. show an increase over 1903 Of
dividends paid amounting to S23.594,139, an in
crease of IL per cent. for the one year. For the
| fiscal year to end June So 1905, these figures
will in turn be largely exceeded.
Confronted by such stupendous record eTiti-
cism of American railroad policy falls fat More
over, this tremendous Increase of profit distrihu
ton has been absolutely n1ggardly compared to
| surplus accumulation, which explains why so
many standard stocks are selling at prices which
| look high compared to existing dividend rates
| Of course the time is not far ahead when over
| flowing treasures Will demand increased dlstri-
| button to NEUTRALITY-SUSPICIOUS. investors DO
not merely take into account the dividends paid,
but also equities in assets. the certainty Of early
| future larger distribution.
| 1t is certain that the coming year will SEQ
| all previous railroad tonnage exceeded-that
railroad earnings will surpass all previous rec
ords providing the means for yet larger dtvi-
dends These faets-so far-meet with scant
recognition in security market transactions. The
security market is almost wholly professional,
and professional tendency is to compare values
| with prior low records rather than with existing
| conditions, and, hence. assume that quotations
are high. This is delusive The only true test
| of value is what the railroads are doing now
| and can fairly be expected to do in the future
Bv this test the great majority Of railroad
| stocks are still below merit level
/ Thus we have now at the turn Of the mafke.
| assertive evidence that the very stanchest in
| yestnent interests of the country in readi-
| ness for that market bettermeut which must be
| the normal sequel of prosperity. not merely
| maintained but continually and vastly expand
| ing To such interests increased dividend dis
| bursements come as no surprise. They md IN
| them only what is natural. only phase OF the
| situation that could be only temporarily post
poned. that could not fail to become in due sea
| son the ruling policy. We are now at the STAR
| of new Wall Street era wherein eNpaholH1s
| dividend disbursements shall be the polaos
| characteristics II is an exceptionally heaIthIu
| token, too that this new era has Tor It's aus
tinguishing policy the stamp of that leadeEsnIp c
| so safely conservative-the leadership eI rem"
| sylvania Railway management
/ This seasoned prosperity OF our country y.
| moreover in no sense Sect1onai-ltS scope sNssk
! the Continent-and even over our perQefs, VI
| dad EXTEND the rising waves, as sgnifeaHtly
| denoted in the phenomenal records OF tIs t- eats
| dian Pacific system at the NoFth, ana sIkH@. k.
sized by the rushing expansion lhteusne,s-
| Mexico Study of any group OF our uahSpoI s1 s
| ton properties certifes national presFessIsa @
| everywhere in material yield being simply 20
| traordinary. I've. as
| anv other section may be satisfactorily taNesr a.
and the expanding figures OF prosperity . io ss, "a.
beyond what any ordinary cohsasi c 1asrs s[ls The
| have anticipated In half dozen years esa NJ
| I-alue of lumber products increases from go
| 100000 10 $199.000,oOo. Farm value 49, 49,
| ments rise a billion and quarter OF Iollas; UAi.
| Tbe cotton crop of half dozen years ago PARE
| touching s300.OOo.0o0. commanded laSt rs SsS
| 6OOOO0OOO. The number of national '-SIt9 1t9
is $50 in 1901 and this year aPpEoXtt"; n ieef
less than $500 0Oo0oo. swell to over s'!luIos ! =
| at the beginning of 1905 And the TaIlEafssa
the section keep pace. Gross ns si1o 1seO63