New-York tribune., 1906-08-19
The Financial World.

F~.R-
upon Mr.. Hartman and his associates bs,ar,,
of the theatric manner in which their divi5s-s
declarations on Union Pacific and soutber, -
cihc were made public. Yet impartial iud,,..-.
must be that whoever was hurt by the ev
tional manner OF the dissemination OF dfvtT.-,
news was involved in the short interest -,
tainly the idea that Union Pacific stockho,4s-
were IN any way injured Is absurd-aItt,9
there is energetic attempt to create such An -
preston. Any Union Pacific stockhOlder s-,,r,
or large. will receive his dividend n he ks.-,
his stock. and. meantime. he has marker -
pOrtunity TO sell hts holdings az a 2O-point ~
vance. Wherein lies the injury? Undoub,.--,
the short interest was caught napping-bur -.
extreme OF consideration OF sympathy is 49,
called for in connection with those Wall sfr.-.
pessimists who make ii their business forevert =
assail and sell other peoples properties They Ar,
not lambs. they are not unsOphisticated innoce1,.
they are keen band OF spectators without tss
least vested interest in the country withour a..
other aim purpose than TO reap sambf,,
profits by promoting disaster to others Vh--
as IN this specific case. they get caught In the-
own trap. not even the widest benevolence ca.
afford to waste sympathy upon them
AS to the dividend Neutrality-suspicious. J-nir,
Pacific upon 10 per cent basis and Southern
Pacific upon a 3 per cent basis-there is mon,
! than ample warrant for such distributi,,
Union Pacific for the fiscal year ended June sa
1905. reveals a surplus available for coumsr
dividends in excess Of S25.O0OOOO which ia a,
increase OF nearly Ss.O00O0O for the one YEAR,
earnings. Southern Pacific. for the same yea-
reports a balance on hand after payment OF an
hNed charges and preferred dividends appToxi-
mating S1SOODO40 It is plain beyond dispute
that on the basis Of earnings alone the decIarss
dividends are well within the line Of conssrva-
tism- In the case OF Union Pacific no draft "a
hcr 10
known to exist. But the criticasters and wise
acres OF Wall Street unite in chorus Of dis
approval and proclaim these dividend declsrs-
tOns to 5e nothing but stock market tricks
Pretence more silly could not be advanced.
Railroad dividends are the final expression of
precedent developments-the concrete form frf1
which are resolved crop profits, industrial profits
commercial profits All make for and are shown
in railroad tonnage and railroad earnings Rail-
road dividends measure results. And these Hsr-
riman dividends. while provoking comment %
varied character, are nothing but the losicsl
sequence OF prior dividend enhancement by Other
companies and are undoubtedly the forerunners
OF other new and increased dividends yet 20 come.
AS was said in this review a year ago. this Is the
dividend era" Stock market manipulation has
but scantly to do with increasing distribution o.
Pronts 10 stOckhOlders-becOme compulsory uy
the sheer force OF accumulation The American
policy OF the last ten years is vindicated Eau-
ings have been applied in vast volume 10 the
physical betteTment OF railroads. and now
naturally comes the pericd a when the capacity
TO earn profits is SO great as absolutely TO force
dividend distribution
To the most ordinary intelligence it must be
apparent that this distribution of dividends is
not a matter OF bookkeeping. not stock market
I device 10 IS the inevitable outcome or the un-
pTeCetented prosperity prevailing Vast crop
yields coming year after year in succession have
created agricultural wealth and have stimulated
industrial production, and have augmented in
ternatiOnal trade, until this country has climbed
20 heights hitherto undreamed Of Those who
would fairly measure security market values
must dispense with the standards Of bygons
tiEles-must av axe to realization Of the new
conditions which have permanency in them
selves. The contrast between our country Ten
years ago and our country to-day reveals simply
a revolution. Wall Street must adjust itself 10
this tremendous change The process Is going
on in the security maTket-has. in fact. been
visible since the fall of 1903 when the last ioW
level was established. but because the apprecia-
tion since then has been devoid Of public specu-
latfOn our professionals nave refused 70 con
cede validity 10 any upward movement As
matter of fact. the absence of public speculauoa
teStifieS to the genu1neneS5 or naFkeI duNdAca
The rise for the last three years has been IN
accompanied by imitation, and but slightly az
fected by manipulation 1t has IN the main been
the inevitable recognition of facts-Such recos-
milton obeying the laws OF nature and economies
OF course smarting under the lash Of losses
the Outcry from dePreSsOnist spectators Is IKE
lv for some time To continue; but sane observers
will not be mSled by the OutpurStlng Volceiui-
ness OF spectators who have gambied ana eess s
lame Mr. Harriman'S relation TO Union Paclnt
as 10 per cent dividend paper IS relatVSy
insignificant beside the Relationship horne ny
] national
comes out of earnings materlaiiN oissel t. -
that figure: earnings make the dividend; A-I'
Hartman has not made the earnlngS-tne eSIu
ings are made by the Vests phenomena s0''
times.
And Union Pacific viii soon be found TO p
but type. There are scores of properties Itu-
the New York Stock Exchange proceeding dloeS
similar straightforward lines Endowed VIZ
earnings surprising every record known OF a.
ticipated. new dividend levels are not mercy
probable, they are assured. unavoidaoe -
this list figure properties Tor iohs t.t47 -
spicuOus In il are the Erie issues; m 1t aIs
most Of the Southwestern properties, Rock lslaAa
their leader: there. too, are the EaWley StocAs,
are Canadian Pacific auXilaries; are SeutaelA S.
Railway and Louisville & Nashvihe-incua uaIls.
indeed virtually every railway stock renectl-5
combination OF good management ana Squ-
dealing. Prosperity is everywhere and A - -
teStatiOn of the reality Of II and the Nasu--s
of IL not one indication Is more certain OF & I-l
clear than appears in the barometer OF railway
In the Industrial list the same situation shows
There too. good times are not merely Clscs.I-
ible. but controlling. What develops IN Uhiseu U
States Steel. dividendwise. may be accepted -
safe criterion. Earnings are unPreteu.i5 a..
earnings representative OF new prents 20 -
gree hitherto unknown; the forward step or dN,-
dends is just simply sure for any other dese,-
Opment would he unnatural-actually Scahus'
Carpers who stand upon Wall street cur6s IA
dieting r H. Hartman are a curious oliN
crew.
OF especial prominence in the new departuIse
New York Central and its auXiiiaTies are AS-s
to fguFe-Very soon. Every one OF the Nande.-
biIt properties is earning such a surplus as WI
warrant dividend expansion. The oficial sta.-s
ment OF earnings issued bout week aso So
some indication OF what from this time torWa.S
may be expected I'm that duarter-hUndreoS y
thousands of dollars increase recorded for ese-
OF the chief properties. Big Four next 70 Ne"
York Central itself "a
What observant students ~ the market VI.
De impressed by. moreover. is the fact tha1 - -
financial interests which directly had coUTnile5-
them M Of