New-York tribune., 1906-08-18
STOCK MARKET OPERATIONS.

Certain speculative interests who We're short
of the Hartman shares were severely punished
in yesterdays stock market in which Southern
Pacific and Union Pacific made sensational gains
following the announcement that the Union Pa
cihc common shares had been placed on 10
rer cent basis. and Southern Pacific had entered
the dividend column as per cent issue
Union Pacific enjoyed a maximum advance Of
17lk points, while Southern Pacific went UP 61s
points, the rest of the list pausing for short
time only before moving in the direction pointed
out by the Hartman shares Notwithstanding
the strength in these securities criticism was
open and widespread regarding he manner In
which the dividends were made public and it
was charged in many quarters that the pay
ments decided upon by the directors had been
known Of in favored circles for a number of
days, and that they were made the basis Of tre-
mendous stock market operations by individuals
and a pool. 1t is estimated that the profits Of
the inside interests run into the millions. but the
Street is assured by an official statement from
Union Pacific sources that in placing Union
Pacific on a 10 per cent basis the directors acted
within the limits Of conservatism, and that there
is no possibility Of future reduction. And yet
the earnings of Union Pacific in the last fiscal
year amounted to 121k per cent on the common
which does not leave much Of margin after
the 10 per cent rate. OF course Union Pacific
will be helped by its income from the Southern
Pacific dividend, as it owns upward of one-half
of the Southern Pacific stock. but is there any
guarantee that Southern Pacific. which earned
( 912 per cent last year. will be able to maintain
3 per cent rate?
Mr. Hartman has brought the Union and
Southern Pacific properties to a position of
! strength through his careful management, but
there is a grave doubt in the minds Of many
people Of the wisdom Of his decision in recon-
mending to the directors the payment of divi-
dends at the rate Of 10 per cent a year. If
time justifes the action. then Union Pacific
eventually will pass out OF the speculative list
and sell a level with such stocks as Lacka-
wanna, Northwest and Great Northern. It is
not many years ago that the Union Pacific was
in the hands of reQfvers. but in the last few
years the country through which the property
runs has enjoyed a season of remarkable pros
/ perity. while the road has been placed in ex-
cellent physical and financial condition, but It
is difficult TO how the road could maintain
10 per cent dividends in times Of trade depres-
! sion which will happen in the future tust as
! they have happened in the past. The company's
/ income from its investments held is large and
supplies an argument for the declaration of the
( present increase in the dividend rate which
however, might better have been made an extra
dividend rather than increase to regular
semi-annual rate Of per cent. Dealings in
Union Pacific were in tremendous volume
amounting to $50, 900 shares. while in Southern
Pacific a total Of 4S1, 400 shares changed hands
/ Who took the stock bothered Wall Street to
/ some extent but il was not hard to realize from
where the selling came. Some people were un-
/ kind enough to suggest that certain large rail-
road and financial interests who have been tied
up with stocks for a long time were responsible
I for the Union Pacific dividend for the sole pur-
pose Of making big market for the sale Of their
holdings II this IS So success certainly must
/ have been greater than the insiders anticipated.
There have been most important announce
ments IN Wall Street in the last two days. the
| influence Of which may be important market
factor for a long time TO come, and accompany
/ ing these developments the idea becomes more
strongly implanted in the observers mind thar
a most powerful aggregation Of capital is in the
stock market with the purpose Of carrying Sc
curities values TO prices far in advance Of any
thing ever before recorded in the history Of the
Street And conditions in the world Of business
favor bull operations. AS to money. spectators
expect to get out OF stocks before a period Of
stringency develops and as a consequence the
slowly hardening tendency OF rates for loans
fails to a ripple of interest on the Stock
| Exchange Business in securities was poorly
, distributed and showed no great amount of pub-
! lie buying the heaviest operators being the
| board room traders, foreign houses and the big
financial and railroad interests. who are no
longer classed as the public Eight shares fur
nished more than two-thirds of the dealings
these being Amalgamated Copper. Atchson