New-York tribune., 1906-12-23
The Financial World

everybody and everything Farc,eal 49,
policy-due to Stock Exchange Bourbonlsr,- -
responsibility. converting farce into -
Adoption by the New York Stock Excher..
methods which. in operation at London. ~.
every condition possibly imposed here won't.
ample afeguard-hswever voIubly eroph,,,- %
the contrary may be oracIes who brate co,.,,-.
ally that we are large enough" to be inds,s
ent and stand alone. This were foolish ~. .
not something worse. II is the policy OF tba ~
York Stock Exchange On refusal to ba r,os
which is enrching call loan banks-v,r,v.,,.'
every such institution able at the close 40 49,.
year to expand dividends and Distribute bo,,
Its all right for the banks TO make monev~
that is their business: but a verv subs4s,.,,
proportion Of what IN 1906 they have bs.-
making represents the contribution OF the ~.
York Stock Exchange Gevies upon customa-,,
for reasons that are curious-using phrsseoo.,,
that is mild.
Wall Street has been much exercised conc.rr
Ing the financial plans announced by St. PAM
Great Northern and Northern Pacific inc,aantaf
70 extension OF lines to the Pacific Coast Tbs
fact that some hundreds Of millions OF nav
securities are created strikes the professiono1
imagination as a horrible disaster In eac,
case. following announcements cana No..
short sales Of the securities IN question T2riIS
ing railroads is apparently considered a aivas-
trOus undertaking. However. all experts certis,,
TO the need Of the Northwest for additional ran-
road facilities. Vast territories await means %
transportation Territories already settled cs,-
not be adequately served by existing rajIroa6s
There must be extension or. else arrestnoer. :.
development AS for the sums OF money IN
Volved what threat IS there in this7 The ronev
will not be destroyed-will not be retired frn,
circulation Much the greater part OF IT win he
paid out In wages to labor-another large part of
IL Will be paid 70 manufacturers. contractors and
others employed In the actual operation Of build.
Ing The issuance Of new stock under these con-
ditions is IN no sense imitation or watering
For every dollar paid into the treasures OF tbs
railroads there is actual use and substantial
asset TO result Looking ahead IN contempla-
ton OF achievement some years hence what will
he the OutcOme7 The existence OF new trunk
lines opening up TO cultivation enormous tracts
Of country now useless-population will follow
these lines just IL did Eastern railroads al
ready built. The new roads will create their
own traffic.
And another most Important point Is the ne-
cessity OF adequate facilities for handling our
ever growing trade with the Orient. II we ara
TO command the commerce of the Pacific We
must have ample railroad and steamship SER,
vice. James J. Hill has long had this IN view
IT has Seen one Of the controlling impulses IN
every step he has taken toward betterfng Pacific
Coast railroad connections. With sufficient rail-
road lines built and 20 be built and with the
completion of the Panama Canal the United
States will absolutely command Oriental trade
the Pacific will virtually become an American
lake. But these considerations are lost sight OF
in current Wall Street transactions. The pro-
fessional mind can only grasp the fnredists
fnanetng r-quired-and professional Instinct Is
20 go short OF any security IN which a question
OF expansion Is involved. Very plain IL fs how
ever that actual owners are not at all worried
StFong-box holdings do not come out on the
market The declines engineered IN 81 Paul
Great Northern and Northern Pacific must have
been mainly due to the putting out OF short
contracts. creating a technical position Of great
danger to the short interest No bear campaign
can ever be successful unless actual holdings
are frightened into liquidation Not the most
dyed-in-the-wool pessimistic crank pretends that
anything OF this sort Is evident. It IS a safe
assumption that all OF these new stock issues
Will be succesSful-by 1ar the greater part or
them will undoubtedly be subscribed for by
present shareholders through accruing rights
because the exercise OF these rights Is a profit
able financial operation.
Toward the close Of the week wee sensation
is produced by the announcement that Htiga-
tton is going to exterminate the American Tea
Company. Perhaps something OF the httensss
Of results attending this disclosure may be qua
Gus preliminary Wall Street circulation. Tho
ice Corporation bogy long ago grew fanliiiar
upon the Stock Exchange-alI our old friends
the Pundits Of the Curb-making daily procla-
nation OF dreadful things that were going 10
happen and ought to happen-becauss a stock
market short interest was entitled 20 synlpa-
thetic consideration This short interest has
been ambitiously Industrious through long
period. They have had abOunding war cries N
variety. Aforetime they were exercised becauss
the Toe Corporation management was neglectms
it's security owners; but throughout this year
their plant has been that those Same Managers
were actually shameless enough TO be looking
out for shareholders Around $40 per share the
short trSsrest was very aggressfvei at 90 theF
efforts multiplied at 20. little dazed. they stn
prOfessed fun hopeless confidence; but afOuno
SO they became exhibits of hysterh-
Actually what the American Ice Company ~
accomplishments accomplished-has been %
Pct into practice plain stralghtrorwaFo U.s. s,s
ness methods Where formerly deficits cortls'
ually intruded. there is now the show or SlosSAr
tial proft-lOsses succeeded by such earnings as
permit reasonable dividend returns 20 investors
Ice Corporation managers make good rneir trus-
teeship.' A property that at one time nad 10
where a single business friend reaches now ths
position where conservative Investors seek 's
scurities.
why shouldn't the short interest be sGvages
Now this Ice Corporation differs virtually
only IN name as 70 long List Of properues
wherein proved earning capacity warrants az
observation-disclosures from what the proresslona4
pesstrnisrn of Wall Street admits. Investors DIS
posed to profit through investment tn SECURITIES
representing increased operating value may tNi
Iy take this Ice Corporation example for cr1-
terion: but il is not at all isolated Similar 0p-
portunities show in Rubber. In Coal In Cotton
seed OIL and with special emphasisl IN payer