Los Angeles herald., 1906-08-18
BY Associated Press.


NEW YORK, Aug 17-Union Pacific
on a 10 per cent dividend basis and
Southern Pacific on per cent divi-
dent basis.
Official announcement of this result
of yesterdays meeting of the executive
committees of the two roads electrified
Wall street today
Speculative excitement blazed up of
a sudden and instead of burning itself
out in a flash as is not unusual on such
an outbreak after a period of specula-
tion the flame thus kindled and spread
until practically all parts of the ex-
change list were embraced in the ferv-
ent demand to buy stocks.
Wall street unquestionably was taken
by surprise. Wall street surprises COM
monty are not due to underestimateS
of coming events. The usual rule that a
period of speculative excitement such
as occurred this morning in the Harri-
man Pacifics, gives rise to so many ex-
cited conJectures. partly voluntary and
partly incited for purpose. that the
actual event on which speculation has
been based brings disappointment and
more likely rush to sell than an ex-
tension of the buying movement
Yesterday rumor mongerS who al
legged that Southern Pacific was to re-
ceive a semi-annual dividend of ~ per
cent rather than the expected dividend
Of per cent were regarded as extrava
CANT For the prospects of Union Pa
cific stockholders the most hopeful
prophet offered no suggestion that more
than 3h per cent for the half year
would be disbursed on that sock, opion-
ion being divided on this a to whether
the increase over the preceding per
cent rate would be Incorporated in a
regular ~ per cent dividend or dis
tinguished as u per cent extra in addi-
regular rate. The dazzling effect of
the announcement of a regular per
cent Semi-annual dividend on the
speculative imagination was thus mag
nifed.
Opinion leaped to the conclusion that
there was a decided representing flnan-
cial power and authority of magnitude
and likely to affect by it's example the
whole, that the period making desir-
able strict retrenchment in the dis
bursemenJ Of corporate profits for the
expansion of facilities and equipment
Of plant had reached it's completion and
that the way was open for the enjoy
ment by the stockholders of a fuller
share of earnings, secure in the capa-
city of their property to meet require
mentS upon it and to maintain the earn
ing power devolved upon.
The conclusive action in the Pacifics
aroused some uncovered short interest
The movement elsewhere in conse-
quence was feverish and irregular for
a time. The general deductions drawn
from the Dividend action on the Pa
cifics was too important and far reach
ing to allow the general advance to be
long Inc new income oasis
offered by the Pacifics themselves, es-
pecially Union Pacific left such wide
room for readjustment in the price that
the rise was vigorously extended by
spasmodic movements.
Other stocks most acutely affected
naturally were those whose conditions
bore the closest analogy to those of
Union Pacific. Pennsylvania and New
York Central were the principal exam
pies by reasons of their large stock
holdings in controlled companies The
Union Pacific dividend was definitely
assigned to the resources of its in
come from Investments. Hence the
analogy. The strength of the market
however, became fairly comprehensive
The continued rise in interest rates
on time loans and the etstimony of the
currency movement of the growth OF
the interior demand for harvesting pur-
poses were forced out OF sight almost
completely in the speculative enthus-
iasm of the day.
Union Pacific's extreme high price
was 179A, compared with 1924 last
night. Southern Pacific rose to SO early
in the day, an extreme advance of 67s
but did not rise again to that level
later. Pennsylvania gained 6. New
York Central and the list generally
from l to g.
The closing was below the best of the
day, natural result of realizing the
days inviting profits
Bonds were irregular. Total sales
paI value, S2950.000.
United States bonds were all un-
changed on call