New-York tribune., 1906-12-16
The Financial World

No great activity shows In m.
though plenty of Developments war;.
uation altogether contrary to that uh,.,
upon the stock Exchange. We oupbt ~. s
TO have actfvity-but buoyancy is dr..hS
of buoyancy through activity wholly inevrI,.1S'
on any common sense business basia
alous as crowdlng facts make stock -
quietude. the situation seems actually "a \.
one of the cleverest of Wall Stree. co-,,s
tors phrases IT: Absence of public .r..,.
keeps the market narrow. but does not r..son
weak. On the contrary. the yery sacs -
margined accounts are at minimum is q Ia saas
nical feature Of strength There Is nm secn-
get scared when men Of buckram fash .vs.. 70
OF lath."
A commanding episode of the week q, ~
nouncement of Great Northern's fnano,.,
to increase the stock Of that ccrnnanv =. aa
amount Of sec 100000. When issues ~. ' us
make total capitalization s210OOOOOO
]. Hill informs stockholders that ths c.n,,.,
obtained Is to be used for necessary ,,,r-a-
ments in transportation facilities Iarr.-
Hill again siSnally demonstrates that ads,,,,
of stewardship Of which his name has b.co,s'
the symbol He shows to stockholders t,,. 80
time is ripe for them to come into partial 49,
joyment of the benefits due In the frs. nlac. :.
natural prosperity and in the second plao. :.
able and high minded administration. rr.r
details of the plan show extreme cons,tarato,
toward shareholders-they are not reou,r.6 ~,
nediately to hand out the price of their mt
scription to new stock, but are granted extendas
terms of payment bearing as lightly upon ,hsrn
as possible
That there Is need Of extension Of tram.
portation facilities is certified by every rail,o.a
authority in the land. In the case Of Cr,a,
Northern there is special demand from z,ch
far Western territory as idaho, washington a,a
Montana Every one OF those States finds DE-
velopment arrested because of the incapacttv .,
railroads to handle the new and enormous t-,,
fc created by crop and Industrial progression
But what happens when Great Northern az,
nounces its plan? local politician OF Minne-
sofa shouts against Great Northern-says ;,
cannot accomplish this transaction vytthour ~
consent or Minnesota- Minnesota of course,
has about all the railroad service it needs and
is not worrying about the requirements OF Other
states The opportunity is presented to make
a little cheap political capital out OF a pureIv
wOrk-that this latest attack does not plva
Great Northern concern.
This whole transaction should be yievet
broadly-sanely-but Wall Street traders hava
preferred to decry It, and the very day thai
Great Northern's plan was announced they ar
tackled the stock with short sales depressn1 ita
tastic performance could not have lasting effect
for there is not the least disposition on the oar.
sellers with ,stock-their faith in James J. Hill
too deeply rooted
In fact. no higher type os railroad manage.
ment has ever been known. The Hill conceptt,n
of duty is that corporate mana cement Is stew
ardship-that IL owes strict account to owners
that business must be conducted along lines
And IL is plain that in the long run such policy
makes just much for public as for privats
benefit. Political controversy to this Is SIM
ply political chicanery.
And. happily. the Hill type OF management.
has become typical rather than exceptional We
see the same high character. for example IN ths
administration of the United States Steel Cor
poration. Here. too is combination OF public
service and strict regard to stockholders rights
Also may be noted the liberal attitude of the
Corporation toward its employees. It has re-
Gently advanced wages. and 1t Just now an
nounces the usual annual opportunity for en-
ployes to subscribe to preferred stock at con-
siderably below market price and with the Gus
tonlary safeguarding guarantees. Such action
goes far TO solve capital and labor problems
Such relations between corporation and ia
shareholders and employees answer any possible
criticism concerning alleged corporate abuses
Incidentally, Steel Corporation business reaches
amazing heights Net earnings for this year will
exceed S10OO00.O 0.O0O-and while at present the
policy Is still pursued OF charging back Iargs
amounts from the surplus to constructions
the building of the Gary plant-the time cannc.
be far off when the common stock must begin
to inherit it's due share Of profits In the shape
of increased dividends. IF present business ratio
of Increase is maintained the Steel Corporation
will have on hand at the end Of next year a
surplus approximatins 100000. .000-equivalent
TO 40 per cent of the entire issue OF common
stock. Ultimately the common stock must be-
come more valuable than the preferred as fe IN
herits everything after payment OF fixed charges.
preferred dividends and maintenance appropri-
ations.
Hill railroad management and Morgan In
dustrfal management represent the very highes.
development of modern finance
In the weeks Stock Exchange record quota
ton ups and downs have been keyed largely to
money market fluctuations. There has been less
effect from common sense appreciation Of facts
than from hysteria-
One encouraging factor is the open deparrurs
Of Standard Oil hnanciers from some Of their
recent grudging bearishness. St. Paul's move
nent reflects this change of attitude. About all
the investors have been scared out Of stocks
who can be scared. so seems to run the official
The Vanderbilt group. hitherto held
cack by the same influences. may begin
10 show naturalneSs. New York Central as
per cent stock selling below where year ago
Z sold as a per cent stock is not merely an
abnormal exhibit is an exhibit Of sheer forcs
md aggressive manipulation upon the part OF
certain quasi inside interests who have IN this
quarter the same personal profit seeking amor
tions that during the past three or four yeas
have been served by the repression OF ST. PAU.
As stated here week ago. Canadian Paelno
and its auxiliaries-notably the Soo-are proI
ting by investment awakening 10 the anazlS
strides which the properties are making IN dlVi-
lend earnings
The Flower group OF stocks are among 'n0S'
sure TO be advantaged by general market nettei
nent In Brooklyn Rapid Transit and Peop'7'
Gas particularly there must eventually % to
lection OF the great gains which they haVs oee