New-York tribune., 1905-12-03
The Financial World

Activity and strength conttnus 70 dfsSfngutzh
the security marnet-but IN spots. rather than
uniformly. Conservative counsel continues too
Some danger elements show-not Immediately
threatening, perhaps. but Of consequences sun
cient to call from careful students OF the Eatua-
ton warnings that the prudent win not tntan-
tionalIy ignore.
Million share days havs ceased 70 b farxs
days-and commission house public cllsuSaEsl
business relatively Insignificant The vast vol
ume OF daily totals divides twixt speculative
members Of the Exchange itself and cots-iss o.
outside millionaire traders-equally professional
The traditional unit of 100 shares disappear;
he is no longer a creditable buyer or seller who
bothers with less than thousands-1O.OO0 share
executions productive of no wonder. Truth :.
that in many quarters. in many respects. Il has
become plunger's market. It is easy 70 iocata
a score whose ordinary complement OF stocka
whether long or short. passes 100000 sharss-
not investment lines. but commitments spec
ulative wholly. In this phase Of the Wall strsst
situation Is explanation Of much that becomau
abnormal-much Of the warrant for the caution
which old fashioned folks are preaching.
Some friends OF ths market confident mat
ultimately the market is bound to have much
further betterment) are. for the very reason thar
they are friends Of the market, impressed by tha
sound sense OF what conservatives are urging
Any character of stocks can be put I'd By
manipulative rushes. by outbUrsts Of trsmsndous
buying; but securities so put up-only to be
played for a transient rise-cannot be expected
to stay up, deserted carelessy by the forces that
lifted them And there is too much OF this sort
Of thing just now IN evidence
The Street is jammed with points and -tps-
Most are fables foolish utterly. Solid markets
have different foundation Only passing super
hciaI characteristics. doubtless. these now
NV-,o-
to fevers-and fevers subside; but, none the less,
while they do intrude they discouraging and
not to be treated as welcome and helpful For
fevered patient there must be sometimes choice
between rest, or-exhaustfon.
This view is not bearishness, It Is but sobristy
as to ignore certain too evident new features
in the market would be not bullishnesS but
bunco.
Underlying conditions do not induce doubts Of
the intrinsic quality of the business situation
What material changes occur are changes tow
ard Improvement Good times records spread
the country over-commercially and financially
agriculturally and industrially we ere In
stronger position to-day than ever before In
history Prosperity is all pervasive- It Is not
because Of anything having to do with basic
conditions that prudent observers are disturbed
Those elements IN the market to which eIcep-
tions are taken, constituting reasons for eau
ton, are of uItra-speculative sort altogether
They are foreign to what constitutes the real
market; they are intrusions, they are handicaps
from which naturally moving market must Be
free Their conspicuousness adds to the danger
of the hurt they can do; and their continued
persistence cannot fail to produce reaction
which might for a time prove embarrassing 20
enthusiasts refusing to recognize detrimental
possibilities
Just as was emphasized IN this review q week
ago. every natural condition IS helpful-ouly
those that are unnatural. fabricated are trou-
blesome to critics who are candid What f5
warranted is not bearish disposition at an-but
a discrimination which shall weigh Intrinsic
value which shall consider how stocks measure
on their earning or dividend bases. dividends
present or fairly IN prospect.
To proceed In Wall Street discriminatory =
only to proceed as practical business men pro-
oeed elsewhere-uniformly proceed II success
is to be accomplished Scant difficulty confronts
discriminating purpose It is no severe task 70
determine the safe side Of financial ahaira The
test Of earnings and dividends is ample tsst and
readily commanded Old time fashions OF mys-
terv are fortunately not the habit now. Only
few blind pools able nowadays to maintain
public favor Open corporation accounting. al
ready customary, promises to be an actual red
uisite for any property. however strong its d.
rectory.
And as has here been urged over and over
again. the New-York Stock Exchange List Is
fairly crowded with bargain opportunities for
buyers of stocks who insist. however thor
oughly, upon applying the intrinsic value test Il
is not necessary that such value, to be reeos-
nized, must be already scheduled upon the divi-
dend Iist-for such rule would eliminate much
of what sven most prudent authorities sensioEF
regard as legitimate and fair foundation for IN
vestment. Such a rule rigidly followed Would
have precluded the possibility Of reaping any
of the~vast profits which have come to buyers
Of Omaha, for exampIe-Omaha which under
Vanderbilt control spent out OF current earnings
hundreds Of thousands Of dollars per year through
a long period while disbursing nothing in oivi-
dsnds-a maintained Vanderbilt policy WhoSe
sequel Cwhose unavoidable resulO was the es-
tablishment finally of a permanent earning ca
paeIty and attending dividends which give 10
Omaha shares a market value OF 2O-and VT
tually the entire capital stock locked away DS
the most conservative investors OF the country.
Such a rule would preclude favor from Nickel
Plate wherein has prevailed throughout recent
years the same Vanderbilt policy pursued Wlth
Ornaha-2O per cent or more Of gross earnings
(aggregating millions millions Of dollars ar
bitrariy converted into the physical perIecuoh
of the property till now IL is disclosed thar u3e
adoption of a normal operating expense ratio
dnstead Of the extraordinary average or - per
cent. hitherto appropriately viii permit the dis
tribution Of per cent. Cor even more) upon me
companys common stock per year. ana IN IsiaI snT,
| disclosure is explanation Of the buoyancy Wnlch
Nickel Plate common stock has this week shoWh-
It approaches 60 As a second Omaha u -
bound ultimately Cand 1t ought not TO Do 4ous
hence) to sell twice that high
| AS Nickel Plate stands in the railway snAse
list so among industrials dividends present q
dividends assured by earnings give attractive