The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-07-24

preston OF 1908 the normal nves'ineh'
. bsorption Of stocks has been rapidly over
taking the production. Formerly the FRO
duction had been outrunning tho demand
In the last two years Wall Street has been
producing stocks at q minimum rate ana
the absorption during the greater part OF
that time, or In the last twelve months
has proceeded on maximum scale. For
the first six months Of the current calendar
wear tho listings OF railroad, street railway,
industrial and miscellaneous stocks on the
New York Stock Exchange amounted to
sass, oe4, 800, as compared with 81 ,27s, es7t7'
for tho corresponding six months OF 1901
OF this 1855 oeA 800 of all stocks listed IN the
iYst half of this year only Si02 ,+50, sC0 repre-
eented railroad securities. The rest we're
street railway, Industrial and miscellaneous
stocks. or the Sl02, 456, 800 Of railroad stocks
listed nearly as, 900 600 was In Union Pacinc
common stock issued In exchange for con-
yertible bonds and all but S3i OIL 800 OF
the total represented an exchange OF secur,-
ties in ono form or another, rather than the
creation Of fresh capital. The tendency
on the part Of corporations having to raise
new capital has been to issue bonds rather
than stocks. The effect Of this has been
to keep down the production OF stocks
The market prominence last week OF
Northern Pacific and Great Northern pre-
fsrred animated general speculation on
the subject Of . permanent REIMBURSEMENT
OF railroad interests in the Northwest.
The market that now exists for Northern
Pacific and Great Northern preferred Is
altogether too narrow and arbitrary TO
permit of realizing on an extensive scale
by those who have participated In the North
ern Securities transaction and desire now
to take their profits. 1t is only reasonable
to suppose that . way will be found to en-
able those who would realize upon their
Northern Securities equities to do 30. Inc
most obvious way would be to substitute
new and lower priced securities for North
ern Pacific and Great Northern preferred
securities in which q broad and active
market could be made. The plans now
forming are believed to embrace some
expedient Of that kind. Meanwhile those
to whom the equities belong are well salts
fed to wait They have larger profits
than they ever dreamed would accrue
to stockholders In the Northern Securities
Company, and are receiving good return
on their money pending the creation OF
market on which they may convert their
profits into cash.
There has been much conjecture as to
the profits of the Union Pacific In It's North
sn Securities equities. They have been
estimated at from Se0, 900, 900 to SO, 900 900.
A conservative banking estimate is that
they amount to not less than $50 1000
and this Is probably as near the truth as
| 1t IL necessary to get. Before the dissolu-
ton Of the Northern Securities Company
the Union Pacific sold part OF its holdings
on a very favorable market The amount
was probably 3l1ooo,ooo. This is all al
| lowed for in the estimate that the Union
Paoifos profits amount altogether to about
$4,000, 900. This is very large profit.
Put out on interest at 4 per cent. 1t would
Weld the equivalent Of per cent. on Union
Pacific stock. It might very reasonably be
said that Union Pacific stock at its present
level Is selling at the equivalent Of par plus
it's Northern Securitiese quities. The stock
was put on . per cent. dividend basis last
week and is entitled to sell at l2o merely
on It's investment yield. irrespective OF
equities or extraordinary prospects There
Is no assurance, OF course, that Union Pacific
stockholders will get the profits Of the COM
pany's participation in the Northern Sc.
c,,rities transaction. The company's divi'
dend policy has been criticized on the ground
that the stockholders have not been re-
ceiving a fair share Of the profits and II
has been said, in the way Of friendly criti'
cism, that Mr.. Hartman regards dividends
as the only unproductive expenditure that
a railroad makes; but notwithstanding al
this, sagacious men to-day are investing
perhaps more heavily in Union Pacific
future than in the future Of any other rail
road property. They believe that as 6
combination trust company and railroad
the Union Pacific organization will becom'
80 rich in the next few years that its shares
will disappear entirely from the realm o
ejaculation. There is perhaps no othe
active railroad stock accessible to the specu
lative public in 80 strong position as Uniol
Pacific. The time is approaching whel
tho company's investment in Southern
Pacific will begin to be productive-perhap
not this year, but certainly next year.
The ease Of money continues, to tn
surprise, it may be said, Of some yer.
shrewd banking authorities. The create
mobility OF international credit to som
extent accounts for 1t. Western bank
have recently been drawing finance bill
, here, which IL q practise that was neve
factor before In the money market situa
! ton, Money Is abundant the world over
, This might change abruptly il peace wer
made between Russia and Japan, Of course
, and money market conditions are subjec
. at all times to sudden notifications; bu
, even those bankers who are looking for
. more active money market in the nea
future SEQ nothing In the prospect tina
, need cause any uneasiness in Wall Street
! It is affirmed with some emphasis on tn
! part Of bankers Of the highest responsibility
, that there Is nothing in the money marke
, outlook inimical to operations on the Ion
, side Of the stock market. The proceed
i Of the new Japanese loan will bring Japan
. balance here up to about $50 100000. 1t
a not expected that this credit will be draw
0 upon to any extent In the near future
Meanwhile, however, the bankers respor
o sibis for the loan would probably buy OK
. change heavily on decline, thereby cover
J.. ing themselves. The Japanese loan transat
!. ton, therefore, is likely to be factor
\ the foreign exchange market for some tim