New-York tribune., 1906-04-15
The Financial World.

preuictlohS tnlch Yet 1t was said in this ra
| view; THE serenity with which the secur,v
market views the money market is testirno,
| TO intrinsic strength without precedent =,
| wholly disposes of any notion that prics I'M
| provement has been the result of manipulation
If the present range of prices were artificial,
J what crumbling away there would have been
when money became abnormally dear In ha..
| Informed banking circles II is believed that Nh.
worst is over-that the natural and seasonal,
| flow of funds back 10 New York will annA.r
| Should IL not, should the phenomenal busnss.
| activity throughout the country keep money a.,
active as to withhold it from Wall Street. then
! beyond doubt relief will be found in gold Inn.
! ports
| This was about the only cheerful view o..
/ pearlng anywhere at that time, but events q,
the week verify the statements and the forecas,
| SO made. Abundant gold imports are engasas
and the call loan rate subsidies 10 sometb,r
near normal. with every indication that tb
| easing up process will continue during the com.
| ing week. O'''
One fact stands out with cIearness-stoc.
| ownership is strong In former times t,,,.
money invariably forced heavy Hauidatior~,.
does not do that now. and this indicates thu,
speculative holdings on margin have become
relatively small.
Another gratifying development comes 10 Ira,
m.
portant interests in the country to found a grea,
central banking institution OF sufficient povsr
10 regulate the money market-to occupv sor,a
thing like the position TO the banks of the COIN
try which the Bank Of England holds in Crea.
Britain. Such a project may meet with much
opposition from those who hold oIdtine NO.
tions about the danger to the people'' az |,
great central bank-notiOns identified with tba
progressive era of Andrew Jackson-but times
change and public opinion does seem sometimes
TO grow enlightened. permitting now, II may be-
legislation enabling our banking institutions 10
do business on rational lines, putting stop to
ludicrous money market gyratOnS II is an
absurdity that the richest nation in the world
must have money market churned in such
fashion has just been witnessed. IL is Oh
noxious TO common sense IL is a menace to
public welfare. In no other country is il pos
thing be permitted
At the end of the week actual buoyancy ao-
pears This show of feeling was not confined to
parts of the market-it was assertve throughout
almost the entire list. Only in exceptional in
stances is there any holding back; and virtually
every hesitant example is the result Of special
influences.
Consolidated Gas. for example. shows weak
ness. What is strange Is that this weakness is
not more pronounced Consolidated Gas for
some time past upon an per cent. dividend
basis. Is now by new necessities forced 10 re-
duCe largely these dividend payments-if tn.
deed il does not suspend dividend payments al
together. The reduction in the price OF the Con-
soldated Company's product enforced by Iegislat-
I've action Is OF consequence beyond what any
casual observer can readily figure This reduc-
tion-quottnS official authOrity-means the ex-
tinctton or Profit II Is. as OF course. are all
aware, the attitude OF cynics in the stock marker
that there is managerial insincerity in assert
ing .he position that the Company seriously SUI
ferS by this reduction The managers NAV be
sincere enough. They declare that in the new
situation II becomes difficult even 10 earn Oper-
ating expenses and interest charges They may
be making conservative statements. Municipal
ownership theorists politicians OF various sorts,
urge that the SO-cent gas rate ought 70 be stl
further reduced. But COnsOda ted Gas mana
gers themselves persist IN averrlng that the
legislation (Which they are going 10 try 20 re-
wise in COurD amounts actually 70 COnfiScation.
Regardless OF phraseo!ogy, it can be accepted
as certain that these managers not trihlns.
Going into court To test the constitutionaIity OF
the price reduction law. they viii proceed in no
half hearted way Their attorneys viii not make
superficial Tight The very worst phases of the
new situation will be disclosed Surely it will
be exhibit Of 'cOnfiscatiOu'' II current per
cent. disbursements have To be reduced merely
10 per cent per cent, the maximum legal
interest rate Dividend showing viii have 10 be
materially below per cent.-be no dividend
showing N aIl-if the courts are TO be impressed
with the burden which the S1-cent legislation
tnfiicts. In yesterdays financial columns OF q
New York newspaper recognized for COnServa-
tisn IL is said that the report is very definite
and positive" that the next Consolidated Gas
dividend viii be only / per cent for the quar-
ter-ths amounting 10 but / per cent. per year.
AS per cent. stock what would Consolidated
Gas be worth?
Two or three months ago. when the Lcgis-
Iature began to toy with the gas rate problena.
when the Consolidated Gas quotation was sub
stantially higher, there was something Of an
OutburSt of criticism against insiders who were
OutspOken in advising stockholders that al 50
cent per thousand Consolidated dividends could
not be maintained on basis which would war;
rant the then ruling market quotation But
since then that counsel has been amply vim
diCated. There sincerity in the advice which
the insiders gave at that time-and there is
attitude that they take now. Problems Con-
fronting them are not trivial are not % be
CareleSSy nodded aside: they are confronted
with the arbitrary Offhand extinction Of % per
cent of their gross earnings by legislative act.
ana WIN the cost or production Within The laSc
two years heavily increased Only foolish peO-
pie will try 70 rely upon the theory that the
trustees OF The Consolidated Gas Company are
insincere in taking the pessimistic view which
they no longer try 10 disguise.
Now, suppose that controlling business inter-
ests determined 10 maintain TO their utmost
what they regard 10 he the vested rights of the
investors for whom they are trusteeS) resolve
that they will make dividend distribution
at all for the preSent-nake dividend until
the courts shall advise them officially as % what
the status of their business situation is-Sup-
pose that all dividends be postponed (nOt aboi-
fShPd0 but just suspended for the indefinite tigno
that the courts viii take in trying the issues
about 20 be submitted-suppOse this COnserva-
tive procedure be adopted, what may the stock
market be expected 10 dOr Provide bu0yanCy?
Scarcely. Impending litigation will not be brtet
In its results are involved consequences which
warrant INSTRUMENTATION upon the part O1
the propertys trustees.
Another bad whack that the market has thfs
week suffered appeared I'm the unforeCast an
nOuncement by the Baltimore & Ohio Railroad
Company that IL was increasing it's capital stock
So 100000. Ealtimore & Ohio is Pennsyi-
vauia Railway auxiliary. There ought not 10 bs
any very great surprise = deluge OF new se-
Curities.
old fashioned prating OF conservatism in rail-
way management in contrast with the methods