The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-06-25
rnr EiNaNrrAL sirrArIoN.

The maghst aa werk showed NJ great
ch6nas irum tao conditions prevailing
iog zine time previous, there h"'na n lack
~ lntsf~-, ~ the pan ~ the arnrfal public
and = eurtihua ncs u the professional ntera.
ituns whieh fgf ~pme time tsa have cun.
tftiriet Nv far ths larger ptotuf'i'n ~
Tho bpa,rrs IN The Hpuf ~ Tho s,prk Fta
ehahae The U,hti nurt al,sence " The
pthllr however,, hesa M rather nurr dis.
raNerHihg IN view ~ The drve'opfr"n'e ofa
favotable Nsiufr Whlch ocrnff"d during
tho srrb and which uhdrt ordinary clfcutrs
aiHhtes might ~ e,trctrl lr stimulate .
fevivalo ~ hiilnah Interest Mosl PROMINENT
In tho lial ~ faeurshlr Developments wae
the completion ~ nrFniia'inna Iof iNe
fniatinn ~ tho Pennsylvania comrnhv''
500 up Un 'uan IN tstia Whtch 'rntkrh the
beginning ~ y nov eta ~ French interest
IN American secWtttirs and aroused hope
tina, iha atrtrhended money a~'rinaHncv
mlahl hr avert ei neSt ~ II Ne u direct fepult
~ this Transaction and tho attention II
mlaht attract w ward American acctIriiiea
from the nos' thrifty PEOPLE In Europe,
The disturbances IN R,HaA II was Thought,
miaht prove n oh'rihutnrv cause toward
tho ~ M effect Nobody believes that
there IL any danger whatever ~ repldie-
tion ~ Russian Government obligations
or ~ n failure TO promptly ray coupons
AZ tho regular datee. but French Investments
In this cla a. Of securities have proved 30
unsatisfactory that u II entirely reasonable
10 assume that hereafter such an oppor-
tunity "a that afforded by the recent Penn
a~ylvania loan NAV he avHiled 81 oth On
account OF the security and Of the return
from the investment. II Ia even among the
possibilities that the French may tighten
their holdings Of Russian bonds and put
the proceeds into American securities OF
an investment class to such a extent as TO
exert an appreciable effect on prices Of the
favored issues. Ranking next in importance
to the arrangement Of the Pennsylvania
transaction in Paris came the increase in the
dividend rate on Baltimore and Ohio com
mon stock from S per cent, to @ per cent. per
annum. This chan &c in the roads dividend
policy had been pretty generally anticipated
and a better illustration Of the resourceful-
ness Of the boar party could hardly be de-
sired than the fact hat before official an
nounoement was made of the action taken
by the directors the stock OF the Pennsyl-
vania Railroad, which practically controls
tn6 DdltlTIlOTe anu oHlO, WAS successfully az
tackled and driven down TO the owest price
at which it has sold recently on the specious
argument that an increase in dividends Of
controlled companies was an indication OF
poverty on the part Of the parent concern
and Of a necessity on it's part to secure from
subsidiaries by increased returns on their
stock a portion OF the money necessary to
carry on improvement works OF to raise its
credit so as to enable il to raise new capital
on reasonable terms. A c~ontributory cause
in the decline in Pennsylvania stock on the
first day OF the week was the rumor that the
negotiations in Paris had fallen through.
but this was show TO be groundless when
full and official announcement was made
the same evening that not only had the
matter been successfully arranged, but that
the terms we're more favorable to the COM
pany than had been generally anticipated.
This compelled some covering next day
and a reversion to the old rumor of the
alleged necessity which dictated the in
crease OF dividends by subordinate COM
panies, but when, with the announcement
Of the larger disburse ments on Baltimore
and Ohio, directors of that road issued a
highly favorable statement OF earnings for
the year, it was made abundantly clear that
the years results justified the action taken,
and that there was no departure from the
policy time honored on the Pennsylvania
and carried into companies controlled by
this road-and which is well expressed in
the phrase, "a dollar for dividends and a
dollar for improvements" Baltimore and
Ohio in the year just drawing to a close
will show earnings OF approximately 1917
per cent. on the $3.50 900, 900 Of common
stock, including the s2S, 900, 900 not yet
issued and through the expenditure Of
which the c%ompany's facilities will be so
greatly increased az to raise the earning
capacity Of the road to a point where in
the coming year it can show fully IL per
cent. on the increased volume of stock,
assuming that no great change occurs in
the conditions Of general prosperity which
now exist. Associat ed with the Pennsyl-
vania management are some Of the most
| important financial interests in this country,
and the increased liberality in dividend dis
bursements undoubtedly meets with their
| approval, which in itself is a sufficient in
dication that there is nothing in the business
or financial outlook to warrant the appre-
hension of any lessening Of prosperity for the
! next year, at all events. While up TO the
present there is no official warrant for the
superstition, it is pretty generally believed
that the dividend on the Norfolk and Vest
ern common stock will be raised from a 4
to a 5 per cent. basis next fall and that even
Chesapeake and Ohio may raise the rate Of
its annual disbursements in response to
the demands Of important minority holders
for an increased participation in the roads
prosperity. The tenor Of crop news dur
ing the week on the whole was favorable
so far as it related to conditions at home,
while the reports from abroad, particularly
from Argentina, indicated some deteriora-
ton in other exporting countries. so hat
part at least Of the advance in grain prices
was based on causes tending to enhance
ment Of the general prosperity Of the United
States. Sinister rumors regarding the con
dition of the iron trade began to circulate
about the middle Of the week, based on the