New-York tribune., 1906-08-20
THE WEEK IN WALL STREET.


Hartman issues which were advanced IN a
manner which caused extreme disappointment,
to say nothing Of losses. to the short interest
in those securities. Announcement Friday
morning that the directors of the Union Pacific
had placed the common stock OF that company
ther announcement that Southern Pacific COM
mon had been admitted 10 the dividend list at
the rate OF per cent year. naturally encour-
aged an active buying movement In Union
Pacific and Southern Pacific both for the &C
count OF the bear element and for traders who
were anxious TO take a position on the long
side of these securities. The directors OF the
Hartman properties held meeting Thursday,
but no announcement regarding their action on
the dividend question was made at that time,
and. as consequence, their decision TO make
public the dividends early Friday caused con-
siderable adverse comment in the Street and
induced the belief IN many quarters that tho
Withholding of the dividend declaration Thurs
DAY was due entirely TO speculative considera-
tons. This view OF the directors action may
not be entertained In all quarters, but the fact
romans that many people believe certain ia
vored interests were informed in advance that
Union Pacific would be advanced to a 10 per
cent basis. and through this information were
able TO secure large profits, both through their
operations on the local exchange and in the
London market. Earnings OF the Union Pacific
in the last two years have been exceedingly
heavy while the same thing may be said Of
Southern Pacific, but there Is no certainty that
future results OF these two properties will war
rant the maintenance OF dividends at the rate
Just announced. A few years ago Union Pacific
was In the hands of receivers, but the reor-
ganization Of the property coincident with re-
narkabie prosperity in the territory through
which the company operates its lines has placed
the road IN extremely favorable physical and
financial condition. and earnings in the year
ended June 80 showed an increase which GER
tainly warranted an increased distribution to
the stockholders. The increase however, de-
cided upon by the directors was heavily in ex-
cess of that expected in Wall Street circles. and
far beyond that warranted by the interests OF
conservatism. In the event Of business depres-
sion, which must develop at some time both
the Union Pacific and Southern Pacific will not
enjoy the tremendous earnings now being re-
ported, and in view OF the large capitalization
OF both companies there will be no certainty OF
dividends being maintained at what many
people consider the extravagant rates Just de-
clared.
Outside OF a few issues. the demand for secu-
rifles until Saturday came almost entirely from
boardroom traders and from the substantial
financial and railroad interests. The latter are
actively engaged in promoting bull activity,
and so far their efforts have been remarkably
successful, with every promise Of further profits
in the course Of the next few weeks. notwtth-
standing the danger signals which flying in
the money market. II may be recalled that q
year ago transactions in stocks Tor the account
Of the larger interests were active an ad-
vancing level Of values at a time when money
rates exhibited pronounced strength, and in
speculative circles 1t was believed that market
movements this autumn will repeat those Of
1905 especially as commission houses and large
pools and individual operators are we'll supplied
with time money to meet their requirements for
the balance of the year. All conditions govern
ing the movement of money point toward sitter
rates for loans in the near future. Throughout
the last week the undertone of the market was
strong. while foreign exchange failed to move in
a manner indicating large gold exports In
the near future It is believed, however. that
this country will be able to secure all the gold
it may need abroad. unless developments in
Russia reach such an acute stage as to compel
liquidation of American securities by foreign
owners for the purpose Of protecting Russian
investments. There is such an enormous capi-
securities that Paris bankers and their connec-
tions in London and Berlin cannot afford to per-
NIT demoralized market for these issues, and
this of course involves the raising OF funds in a
time OF trouble by the sale of other holdings,
such as Americans. for instance. and the keep
ing at home Of gold which otherwise might be
exported TO the United States.
Foreign trade figures for July show of the
smallest trade balances in favor of this country
ever reported. and the chances are that whatever
gold may be brought TO New York will represent
foreign loans more than money due our bankers.
This country in the last year has been a heavy
borrower in London and other foreign cities. and
as a consequence OF this and other known factors
the excess of our exports Of merchandise over
imports practically has been offset as an infiu-
ence on the foreign exchange market Fortu-
nateIy, the outlook favors the accumulation of a
large trade account TO our credit in the course
of the next few months. owing to the bountiful
crops and the general demand in European
markets for the products of our manufactures,
but 1t is conceivable that Europe may take ad-
vantage Of the high prices OF American securi-
ties to liquidate holdings OF American stocks
and bonds, irrespective OF developments in
Russia.
Since the beginning of the fiscal year the
revenues of the government have been heavily
in excess of expenditures. and were it not for
the assurance OF the Secretary of the Treasury
Of his intention 70 come to the assistance of
the money market in of need. apprehen-
sion of serious stringency in rates for money in
the fall might be entertained. AS 1t is. borrow
ers must make up their minds to pay high
figures for accommodation in the autumn. The
demand for currency from the interior has set
in earlier than usual this year. an indication Of
which is presented I'm the rates for domestic
exchange on New York while the probability
is that the outward movement will be heavier