New-York tribune., 1905-08-13


change wees has shown IN m acti~i-~ an,
buoyancy ~ the exceptional invsstrteu, q,
sues. such New-Haven. T4srkawarna Ta1,
ware snd Hudson Jerssy central. Nor,,.
western. Omaha. 81 Paul Illinois ~aa.-,f
Louisville Atlantic Coast Line Northern racss
and Great Northern preferred. Finally f. 10
comes clear 20 evsn most rurblin9 spac7lia.o-.
that ;nvesfT1ert demand has practicallv ,-r.-
clean the market supply Of high class sasso,a,
railway shares This = not a r{sv condition. A.,
progressive development hes been patant -s,s
along. Investors have found in snnusl revo-.,
year after year sbowinGs Of gross earnings e.--
ttnuahy mounting. showinss of dividend carr
ings expanding from : and 8 per cent 70 sv,o.
and thrice such rates tiU now on re stock Er-
change the list Is long Of properties with oacia,
statements disclosing - per cent and more pr
year earned for shareholders distributed -sfa-
vested to bring stU larger ultimate returns. or
put into augUenting surplus accounts.
II is absurd To suppose that buying of fhsss
shares is merely speculative Their coating SUP
ply r. so scarce as 70 prohibit short selling sna
their price is too nigh TO tempt speculative buv-
ing. Investment absorption i= the only expIana-
tion. Demand from this source cannot be salts
fed much longer from The group OF stocks citsf
Investors must turn attention from thA stocks
at 200 and upward - an equally interesting
taken as the mean level Among these ar.
Canadian Pacific Louisville Atlantic Cosr
Line. Nashville and Chattanooga. New-Tor<
Central 500 Line. PeuusvIvania and though
still somewhat lower. Union Pacific. These ara
the natural market heirs OF the Lsclzavan1ss.
New-Haveus and Delaware and Hudsons. Thsss
also pr esent enormous accumulation OF earnings
far in excess Of present dividend disbursement.
appealing forcibly 70 investors.
There is another side 70 the market which Gala
for consideration-the speculative side. SpscI-
lation does not concern itself with 5000 or 500
stocks They are too expensive 70 carry o1
margin and they subject 70 violent fuctua-
tions Speculation by the general public VIXEN
IL cones-and it would seem that IL cannot
long he dAferrsd-wiT ind fts outlet IN tAs
cheaper securities many OF which present frs
cinating possibilities Take. for example. Erie
communicating below 80. The recent diviisnd
declaration on Erie second preferred IL Official
announcements Of financial strength. OF total
stock issue the first and second preferred
together amount 70 bur s640OOO01 Will
the common issue exceeds S112 600 O00. To
own the common stock fs to own the road
II il OF common knowledge that there
has been recent heavy bUying OF the
common stock for important interests not vet
disclosed. Some rumors lodge this purchasing
man interests. and yet others with Joint acquirs-
ment by PennsyIvania-Sew York Central How
ever this may be. the fact OF important buying
IS unGuestioned. revealing desire somewhere %
obtain control of the only Independent trunk line
left running from the seacoast And apsr-
from this special buying is the indubitabe fac
that maintenance OF Erie earnings means accu-
mutation OF surplus available for common slocN
dividend distribution in the future. II Is not t'
I "a
certain to forge ahead
And speculation will find even cheaper propos'-
tions of merit-Of which illustration is afforded
by Mexican Central selling around 2"
Mext-o has come upon the gold basis. whicE Ts-
moves many NeXed questions from consldvfaton
or Mexican affairs Mexican central prosper
wonderfully shows every sign Cunder American
mana cement -ef taking rankzvith similar rsii-
roads in :he United States - s
Among the weeks developments have come
evidences of expansion of the publics interest
In the market. This shows pretty generally
throughout the list Take American Smelling
for illustration. 1t is probable that during the
recent advances Of that stock larger purchases
have been made for the account Of outsiders
than at any time in it's history Careful in
vestors take II around the current quotation
who could not be tempted into It al half the
prfce-and reasonably enough. for meantime
there has been actual revolution i0 the prop
erty's condition. A present. with earnings three
times as large as the dividend IL paws the stock
is intrfnsicaIly cheap while upon authority
recognized the very highest IN trade circles.
the company seems assured Of new net income
almost Immediately which VIII add yet further
very large earning pOwer-a0ove every thing elsa
IN considers ion Of the American Smelling prop
erty's progress. however, being the influence o.
the character of the manage controlling i.
They who are responsible for the property neysr
move backward, and they have never y-t failed
to move forward. Smelling ought soon O. sell
on market parity with Sugar Trust
The Hawley stocks, to which attention vas
called here last sunday have al done veI dur
ing the week. and are likely to score further
substantial advances. rejecting the benefit 81
progressive management. For ezauplihCst.on
of what Hawley roads accomplish. take the sx-
hibit at the close of the fiscal year Of the colo
radO Southern. a property contemplating expan-
sion along large lines. Both gross and net earn
ings are much increased. Gross earnings in 1900
were s4.2S734S. over which 1905 shows gain
OF, approximately. s2.0OO.0Oo or - Per cent
Gross per mile in 1900 showed SS71e while the
1905 figures are S5.53s-incresse approXimating
so per cent.
Expenses are about 5S15 per cent and should
be capable Of reduction. owing 10 new equip
ment and other improved facilities calculated q
lessen cost OF operation. At rate as high as 70
per cent there would be a margin OF S1l09eV
over per cent dividends on both classes cf pre-
ferred stock. while IL expenses be brought down
TO 6S per cent-a normal level-prOhtS wcuiI
equal full dividends on the preferred issues and
per cent on the common.
Denver and Rio Grands q connecting roao.
over which Colorado and Southern has trsekags
rights on ffty-eisht miles. operates for o. pe'
cent. OF its gross earnings. On this basis Coi-
orado and Southern would earn per cent rct
only on it's two preferred issues. but per een
Gle ar