The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1906-12-02
Union Pacific Makes Most Re-
markabIe Showing
is LUCKY MAN
Presidents Message Will Say Strong
Things About CURLING Corporate
PoWer-South Sea Bubble
Methods in Mining Stocks.
BY w. G. NICHOLAS.

AHO CNCnt VI ll6 Ntch Ill WAN SNiCN-
was the publication of the annual re-
port of the Union Pacific. Wall street,
of course, had a pretty good idea of
what the report would show, and the
speculative interest in it was not very
great. A wonderful array of figures could
not be digested in the financial COM
munity in one day.
1t is certainly remarkable achieve
, ment that a road that only little
while ago was bankrupt has now reached
the position where 1t holds sufficient
collateral wealth to liquidate its entire
funded and preferred debt, leaving its
magnificent transportation plant and
tremendous earning power which goes
with it and many millions to spare as
the equity and heritage of its common
stockholders.
AS a commentator in Wall street says,
it Is difficult to say how the credit for
this achievement is to be divided between
prosperity, James j Hill and e. Fl. Har-
riman, whatever criticism may be passed
on Mr.. Harriman's methods Of conducting
his financial operations. 1t is not to be
ques toned that he Is one of the great
railway men of the world. Although he
operating man, still he has placed tho
operation of his roads alongside of the
best roads in the country.
Mr.. Hartman banked on the prosperity
of the country and won out. He expended
millions with a lavish hand in improving
the physical condition of his properties in
a way that astounded more conservative
railway men. Already, the operations of
the Hartman roads show that the nil
lions have been well spent Mr.. Har-
riman has been lucky. During the past
eight years that he has been upbullding
Union Pacific and its allied lines the coun-
try has been passing through the most
marvellous period of commercial pros
perity ever seen in any country. The
west has grown up so fast and wealth
has been made there so rapidly that it
has been a pretty poor railroad that has
not made money west of the Mississippi.
Hartman Is Lucky.
Mr. Hartman was lucky, too, in his
northern securities investment. The dis
solution of the Northern Securities COM
pany left Union Pacific with a mass of
securities on its hands that have grown
enormously in value in a short time Ever
since the company was dissolved Mr..
Hartman has been feeding these secu-
rites out to the market and the operation
shows profit to the Union Pacific treas
ury of nearly $40. 900. This was luck, or
course, In a way. AT the same time Mr..
Hartman knew when he bought into
Northern Pacific that he was buying into
a property that was worth intrlnslcly a
lot more money. The Union Pacific treas
ury benefited by his foresight.
The great profit, of course, in the Union
Pacific's purchase and sale of stocks in
the Northern Securities merger was
brought about very largely by James j.
Hill. The enormous rise in great North
ern stock because of the potentialzing OF
the company's iron ore riches worked
greatly to the benefit of the Union Pa
cific treasury
The remarkable showing made by the
Union Pacific report. while it justifes the
10 per cent dividend rate on Union Pa
cific common stock does not justly the
way Mr.. Hartman raised the dividend,
but laying aside the morals Of the ques-
ton 1t must be patent to all that the
Union Pacific is earning enough to pay
10 per cent and more If need be. If Mr..
Hartman had followed in the footsteps
of Mr.. Hill in giving his stockholders
fore knowledge OF radical changes in
financial policy 1t is likely that Union
Pacific today would be selling much near
er 80 a share than 1t is. Most of the
stockholders in the Great Northern have
such implicit confidence in Mr. Hill that
they never bother about marked fuctua-
tions In the Hill stocks. Great Northern
swings around through radius of 20
points without bringing any stock on the
market to speak of, but every 1 point
fiuctuaton in Union Pacifis stirs a lot
of holders of the stock into inquiring
whether Mr.. Hartman Is trying to sell
out on them, or is trying to get some
thing valuable away from them.
Hurt American Credit.
There Is no doubt that the manner in
which Mr.. Hartman increased the Union
Pacific dividend rate from to 10 per cent
hurt American credit abroad. The con-
seryatiye old bankers OF London and
Paris cannot keep up with this Ameri-
can pace, and they feel that our Ameri-
can railway financiers, should the 'oppor-
tunity arise. might be just as secretive in
Gu ting dividends in two as in doubling
them. Our credit abroad is not nearly
as strong as It was a few months ago
The Union Pacific, because of the great
amount of money 1t has been realizing
from the sale of the Fiji stocks has been
playing a very important part in the
banking situation. At the end of the
fiscal year the company was loaning in
the call money market $35,0O0,000. Out
of the 90 companies in New York City
that are members of the clearing house,
there are only half a dozen that loan
as much money as this. The Union Pa
cific as a banking institution has been
ranking with the City, National Park,
Bank of Commerce. First National,
Chase and Corn Exchange banks With
the high rates that have been prevail
ing for call money the Union Pacific has
been, no doubt, earning lot Of money
as a money lender, and this will appear
in the next annual report but It Is hard
" probable that Mr.. Hartman will leave
any great sum of Union Pacific money
lying loose to lend to brokers. This
money will be invested in the stocks of
other roads. If it has not already. Mr..
Hartman has bought a big block Of Read
ing for the Union Pacific and has made
other similar investments. The Union Pa
cific treasury is going to be most re-
markable holding affair 1t is we'll to re-
call that a little over two years ago Union