New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-04-30
The Financial World.

sion OF Yesterday excited 20 the point OF seii'-
panic Tangible warrant for any suen deVeiOP-
ment could nowhere be found IN any se"sle
business condition. The Street had been flooded
with sensational rumors, prudence detsriorated
into suspicion, conservatism was pounded ihIo
apprehension. Yet Of the tales that circulated
no sponsor could be found for any. But all
seemed to be vOlleyed from one common quarter
and It was not possible TO conceive OF any origin
for them but the origin Of conspiracy. There
has been simply . stockjobbery carnival
Actual unfavorabIe developments comprise
the Milwaukee bank dedication the AquitaO'e
disturbances and the Gripping OF huinDer u
large spectators by the collapse III "he@' DS'
that these actual developments warrant sueh
o1+ro,,,, declines as appear in the security mar
lzet iq absolutely absurd. II Is not what mas
bappened. but what Is limited at. which mas
bred decentralization The air is thick with
rumors OF impending trOuble-no reputation TOO
high TO escape Sssailment-causing nervous
anxiety which only the strongest and eiearest
heads can withstand. Unfortunately TINS IL a
phase Of security market speculation always
/ liable to develop TO matter how prosperous the
times
Put the rumoTmonger does not put his niger
,,Don a single serious flaw in the situation-hls
'-.4o-o~,oas are all vague. untrustworthy and in
credible Facts continue to marshal themselves
IN the ranks Of hOpe-every business disclosure
stimulating confidence. Witness the statement
of the United States Steel CorpOration-net earn
ings for the first quarter OF 1909 aggresatihs
SOB 900 900. And these net earnings are arrived
AZ after deduction for repairs. renewals ana
maintenance on the most liberal scale which
Quoting high authority approximate $6'SO0OLo.
Again from the net earnings thus scaled down.
] an extraordinary deduction is made in excess OF
/ S. OOO 600 to pay for additional property, con-
struction and capital obligations Those taIllll-
! vrrtb bookkeeping
/ easy It would have been for the Steel corpora
/ ton to present much larger net hsures WlIhouI
aving itself open to criticism. And after these eX-
/ traordinariIy conservative deductions, ana aIteF
/ payment of preferred dividends. the surplus IN
/ creases S2jOOOOO. Does this spell ruin! Does
/ this warrant the reckless selling Of the aoso-
/ lutely safe per cent. preferred, Whlcn carrier
it below 90 yesterday? Is not this steer exiiplS
sturdiest prosperity? Is it wisdom for holders
! to sell their Steel shares because the tongue OF
nameless TumOr Wags?
plies with equal force to every security which
/ can present valid evidence of earning capaciIy.
/ Value must and will be registered oy earhins
power-not by the WITNESSES OF WaH street
Much confusing cIamor is heard about the de-
cline in wheat. Trade at large IS injured by ar
tihciaI prices and, per CONTRA benefited by nor
NAL prices-prices made by the free play Of sup
ply and demand. Nothing could be more help
full at present than the resumption of normal
movement in the wheat market. Flattering pros
poets for the winter crop and favorable condi-
lions for the spring crop promise a harvest equal
! to or exceeding the record. The short crop OF
last year cut wheat exports down TO almost
nominal hgures-should produce a substan-
tial export surplus this year 1t will find ready
market abroad at good prices. Thus the aban-
donment Of the wheat corner is a distinctly IA
vorable security market factor. although for
the moment it compels sales of securities by
. lines
/ wheat and stocks, and whose margins became
exhausted.
Another significant development Is the placing
OF heavy orders by railroads for locomotives
| Indeed liberal railroad orders for all kinds or
equipment prove the commence OF rairoaI man ZEN
ayers, not only in the existence put IN the ee5z
tain expansion. Of hourishing conditions. or
course, the daily Spectator does not give much
/ heed TO the recital OF just such plain, simple
facts as mention but these facts are not moon
shine. are not the OutpOuring Of exubeTant mag
inaten-they are photographs from life. When
the orgy Of SANDER and rumor ends. the facts
will still be found with us-and will be assertlve
There was one midweek development carrying
more significance than may be popularity recog-
nized-the quick. sharp reaction on the dis
closure that Norfolk and Westerns dividend
rate was not to be advanced. Predictions Of
such an increase have flooded Wall Street for
months past and some current representations
were made to appear seTni-OfictaL The truth is
that at no time has there been any warrant for
the view that Norfolk and Westerns conserva-
tive management would make larger dividend
expenditures for the present there being ample
reason for outstanding resources, splendid as the
property's progress has been. But the stock
jobbery coterie could not refrain from invent
ing circumstantial fables to help their market
rigging along with the result that acute disap-
pointment was felt by buyers who were deceived
into the belief that there practically an
official promise of dividend increase. In this
particular case it happens that the property
is one we'll worth any market price it has yet
touched and though for the present conserva-
tism keeps dividend disbursement at per cent.
there is warrant for investment confidence, for
Norfolk and Western a progressing Pennsyl-
vania property must be still better for the
upbutding policy that rules 1t.
AS with Norfolk and Western, so elsewhere
mistakes are evidently being made in some divi-
dend forecasts. For example, the much heTalded
point that the st. Louis Southwestern direc-
tors about to put the coHpany's $2OOOO.OO0
preferred stock on dividend basis would seem
to be dispelled by brief study OF the road 3
financial positOn-the average Indebtedness OF
the property having risen during the past half
dozen years from 500. 800 per mile to $83 25O per
mile, an interest bearing debt augmentation OF
S1O.3JO per mile. or over - per cent, while
fxed charges increase from $S25. 612 in 1898 to
$1.475.OOO for 1904. an increase Of over IS per
cent.
1t seems strange with so much that is tangi-
BILE and indsputable) that market manipulation
should feel called upon to chase will O. the
wisps. relying upon the invention Of fables to
help their campaigns along. Our security mar
ket is crowded with bargains-securities which
were bargains at any price recently touched.
and doubly bargains now. So forceful have been
developments in many quarters that any fairly
intelligent observation finds warrant for in
vestment value sure of augmentation. This is
not merely so IN isolated instances-it is so
OF