New-York tribune., 1905-03-05
The Financial World.

The security market Of the week has h,4
wider variations than Of late. but winds up VT
renewed demonstration Of strength. the plain re-
suit Of unchanged governing conditions
/ transactions in iadustrials largely inc-easa
/ rejecting growing appreciation OK lOurishlne
/ trade conditions especially evident In sssei ara
| iron circles. Most conservative authorities pre-
i dict a steel boom-pIants all over the counsrT
are running overtime. taxed to their utncs-
capacity. In the pittsburg district freight ton
mage is 50 eongested that the United States Steel
Corporation is loanng locomotives and cars to
+ railroads to facilitate the movement OF trafac
Railroads are placing orders for locomotives.
steel cars and equipment of all kinds IN unprece
dented volume and the same conditions prevail.
| in structural steel.
! Those who do not make special study os
| iron and steel may be unaware OF the enormous
| progress accomplished in this country in less
than ten years. Take pig iron production. ana
examine some comparative figures In 1896 the
total output was below 100000 tons-in 1904 II
was 21OOOOOO tons. II future growth eqaass
that of the past ten years We shall exceed a
production Of over %. 100000 tons By 1919 With
population increasing at the rate Of 100000 a
year. consumptive demand for steel products
Will probably make the ratio OF increase even
higher.
In this connection the proposed merger os
Southern iron and steel companies is Of high In
terest. II It be accompIished-and Joseph H
Hoadley is authority for the statement that sue
cess is assured-ft would mean the unihcation OF
Southern iron and steel interests. insuring ste
bility OF quotations for product and effective
economies in operation of the same character az
| those perfected by the United States Steel Ger
poration. The State Of Alabama alone is BRO
ducing 100000 tons Of pig iron year whichf
sold at 50 per ton would yield a profit sufficient
/ to pay all present fixed charges and dividends
| Of the companies involved In the purposa4
merger-and that same pig iron is now selling in
the neighborhood of S14 per ton leaving com.
Portable surplus Of 50 per ton. or $10.OO0OO0
| As to the future Of our Industrial corporations
it can be assumed with certainty that We shah
not go backwards a manufacturing nation.
| but continue to expand TO meet the reouira
| nents OF our own growing population and also
| 10 get cur fair share Of the markets OF the
world Recognition Of this basic fact accounts
amply fcr the development showing IN the IN
dustrial department OF security market
Absorption purchases are discernibIe through
cut the Industrial list stocks like Steel preferred
Sugar and Peoples Gas-assured dividend pay
ers-are particularly in request, while lower
priced issues with good prospects are ending
Feady market Some Of these low priced stocks
are hAeiy to have sharp advances with the gen.
eraI markets strength maintained
IN Peoples Gas there are certain special rea-
sons for market improvement which viii soon bs
disclosed.
Renewed activity and strength may be expect-
ed In Federal Smelling issues Insiders do M.
hesitate to predict par for the preferred stock
as an early accomplishment which can be count-
ed upon TO last
Ihat point seems to be reached in the general
market. however. where the exercise or r,,,,-
discrimination is essential. We have exbibra
OF a number of stocks in which unwarrartaa
manipulation proceeds. Take for example 50
excellent a property as Southern Railway
whose management stands for what Is pro-
gressive as well as conservative Wholly apsrr
from the views OF its controllers. a Wall Street
pool taking hold of Southern Railway CON-
mon' ehurns the stocks quotations day by day
ana the Street is oVerrun with "informatjon9
suggesting that some extraordinary rise is due
in the stocks price. Perhaps such a rise nav
be forced; il will not come naturaIIy-for South
ern Railway has not earned as much an per
cent on its common stock in any year Of It's
history.
There is S6OOO0.000 OF preferred stock. which
received L per cent. in 1897 and 1S9s per
cent. in 1899. per cent in 1900. 4 per cent. in
1891 and ) per cent. IN 1902 at which rate
payment has continued; and the fact thar tbs
preferred as a per cent dividend payer has not
commanded price as high as par indicates
the condition in which the common may be
pected to remain for some time 70 come.
The history OF the Southern since reorgsni-
cation in 1894 has been one Of gratifying prog
ress but to earn dividends on $1SOOO0Oo0 stock
(S120OO0,OO0 of which is cornmon) Is sorne-
thing of task for property which started
out dilapidated. Reduction in operating cast
has been impraetieable. owing to the necessity
for liberal expenditures maintain fair
physical standard - the proportion OF gross
earnings so used averaging beyond 30 per cent
And capital obligations have largely increased
to provide for the obvious needs OF growing
traffic At the end of 1895 the funded debt
was ST4,351 600; at the end Of 1904, $102-
434. 600. This is an increase Of SISOSS,OOO o.
more than 100 per cent. For 1895 fixed charges
and rentals were S4,195.925; for 1904, $500
32S; an increase of S4 T56. 40S-nore than 10
per cent.
Although Southern net charges are no more
per mile than those OF Louisville and NASH
Vile. another Southern system. the profit per
mile OF the latter is so per cent. larger tnan
Southern's. Louisville net earnings on ooIo
miles for 1901 were more than a million o0t
lars larger than the net on Southern RaiI"sSs
-T,164 miles
To pay even as small a dividend as per eenl
on the common stock. Southern haliNay w. W.
have to secure further Increase IN net eaL ,s-
as large the increase shown FOR the pase AS-
years-1904 against 1900.
After ten years Of expansion on a large sea7.
OF marvellous growth and Development .l
fact remains that there is nothing 10 lnuSstt
early profit distribution on the common 500
Instead. the per cent on the preferred Is 0s
margin narrow enough. =,
A great work of reconstruction has been N