Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-12-02
Financial News Letter
BY W. G. NICHOLAS.

| the week in Wall street was the puDiicatioh
| OF the annual report of the Union racine
Wall street, Of course. had pretty Sooo
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 dtgested in the financial community
| in one day. 1t is certainly a remarkable
achievement that a road that only little
! while ago was bankrupt has now reached
the position where 1t holds sufficient cclat-
eral wealth to liquidate its entire funded
and preferred debt. leaving its magnificent
transportation plant and a tremendous
earning power which goes with it and many
millions to spare as the equity and heritage
of its common stockholders AS COM
mentator in wal street says, 1t is difficult
to say how the credit for this achievement
is to De divided between prosperity, James
!. hill ana f. II. Hartman
Whatever criticism may be passed on Mr..
Harrimans methods OF conducting his
financial operations, it is not to be ques-
toned that he is one of the great railway
men of the world. Although he disclaims
any credit for being a railway operating
| man. still he has placed the operation of his
roads alongside OF the best roads In the
country. Mr.. Hartman banked on the
pI osperity OF the country and Won out. he
expended mil ions with lavish hand in i'm
proving the physical condition of his prop
eItleS III d way that dSlOuuQeU tlOfe COIf-
sentative railway men. Already the opera
tons of the Hartman roads show that the
millions have been well spent. Mr.. Harri-
| man has been lucky. During the past eight
years that he has been up0uilding Union
Pacific and its all ed lines the country has
been passing TIN ough the most marvellous
period of commercial prosperity ever seen
IN any country. Tie west has grown up SO
fast and wea tn has been made there SO
rapidly that it has been pretty poor rail-
| road that has not made money west of the
Mississippi Mr.. Hartman lucky, too,
in his Northern Securities investment. The
dissolution OF the Northern Securities Com
pany lett Union Pacific with a of Sc
curI,ies it's hands that have grown enor-
mously in value in a short time Ever since
the company was dissolved MIR. Hartman
has been feeding these securities out to the
market and the operation shows profit to
the Union Pacific treasury of nearly $io,-
O0~;COo. This was luck, OF course. in way.
At the same t.me Mr. Hartman knew
when he bought into Northern Pacific that
he was buying into property that was
worth intrinsicaliy a lot more money. The
Union Pacific treasury benefited by his fore
sight. The great profit, of course in the
Union Pacific purchase and sale of stocks
in the Northern Securities merger was
brought about very large by James ].
Hill. The enormous rise in Great Northern
stock because of the potent:alizing of the
company'S iron ore riches worked greatly
to the benefit of the Union Pacific treasury.
The remarkable showing made by the
Union Pacific report, while it justifes the 10
per cent dividend rate Union Pacific
common stock, does not justify the way Mr..
Hartman raised the dividend. But, laying
aside the morals Of the question. it must be
patent to all that the Union Pacific is earn
ing enough to pay 10 per cent, and more II
need be. If Mr.. Hartman had followed in
the footsteps of Mr.. Hill in giving his stock
no ders foreknowledge of radical changes in
financial policy it is likely that Union Pa
cific today would be selling much nearer
2o3 share than it is. Most of the stock
holders in the Great Northern have such
implicit confidence in Mr. Hill that they
never bother about market fluctuations in
the Hill stocks. Great Northern swings
around through radius Of twenty points
without bringing any stock on the market
to speak of, but every one point fuctuation
in Union Pacific stirs a lot of holders of the
stock into inquiring whether Mr.. Hartman
is trying to Sc out on them or is trying to
get something valuable away from them.
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 conservative
old bankers of London and Paris cannot
keep up with this American pace and they
feel that our American railway ffnanciers.
should the opportunity arise, might be just
as secretive in cutting dividends in two as
in doubling them. Our credit abroad is not
nearly as strong as 1t was a few months
ago The Union Pacific, because of the
great amount of money it has been realizing
from the sale of the Hill stocks, has been
playing very important part in the bank
ing situation. At the end of the fiscal year
the company was loaning in the ca money
market $50, 600 600 Out of the ninety-six
companies in New York city that are men,
bers of the clearing house there are only a
half dozen that loan much money as
this. The Union Pacific a banking insti-
tuition has been ranking with the City. Ma
tional Park, Bank of Commerce, First Ma
tional, Chase and Corn Exchange banks
With the high rates that have been prevail
ing for call money the IyniOn Pa ci6c has
been no doubt earning lot of money as a
money lender. and this will appear in the
next annual report. but it is hardy prob
able that Mr.. Hartman VIII 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
bought big block of Reading for the
Union Pacific. and has made other similar
investments. The Union Pacific treasury is
going to be a most remarkab bic holding af-
fair. 1t Is wei to recall that a little over
two years ago Union Pacific was selling
around $75 share and was paying per
cent. and public spectators were wonder
Ing whether it was a safe purchase at that
price. This only goes to show what extra
ordinary things can happen in a stock mar
ket In a country with the possibilities of the
United States.
Two years ago President Roosevelt in
his message to Congress. had something to
say about the regulation Of railway rates
" oil Sti Get udu kHOWH IOF some Gays about
what he was going to say. but on the day
that he said it the Standard Oil specula-
tive party. ostensibly to show its displeas-
ure, pulled the pegs out of the market
Tom Lawson, by some underground con-
nection, learned that the pegs were to be
pulled out of the market, and bombarded
the speculative community with his now
famous bear attack The result was the
Lawson panic of December, 1904 We call
it the Lawson panic, but in reality it was
a panic brought by the Standard Oil
speculative clique to show its displeasure
al Mr.. Roosevelt's Interfering with the
operation of the railways. The Presidents
message this coming week will say much
stronger things about the clubbing of cor
porate power and the limiting of fortunes
than two years ago, but so far as can be
seen the Standard Oil party is not going to
throw a speculative spasm in consequence
The reason for this is that the Standard Oil
party is now loaded up with stocks that it
expects to distribute to the public at
higher level OF prices. and it knows that
the public cannot stand now another blow
like that of December two years ago. Wall
street doesn't seem to be disturbed over the
forecasts of the Presidents message that
have been received here.
Because James J. Hill did not furnish
diagram with his Great Northern ore melon
oil CT hoxy