The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-02-11
GRAINS and STOCKS

pe Salu 10 De ON the CnfeSnOld OF Inc |
first OF the crop-scare periods of the
year. The winter wheat begins to be
the important consideration after
March /, in any year, and earlier if
weather. conditions out of the ordinary
prevail. This season there has been
some complaint of dry weather, but
nothing very serious, while recent pre-
cipitation, altho not general, covered
some territory where needed. The
grain market, and the stock market
alike, are engaging greater interest, for
while the effect OF any lowering of
the generally fair promise would be
reflected at once in the grain pit, it
would be felt none the less surely, tho
not so quickly perhaps, in Wall street.
A good snowfall over the double holt
day would put an end to much COM
nlent, not wholly unfavorable yet sug-
gestive Of possible later damage, that
has been coming from portions of Kan
sas and Nebraska.
The stock market passed into the
purely speculative stage some time ago,
following long upward pull, and no
longer appeals to conservative invest
| ors in even the giltedge railroad Sc
curities, for while these may be bought
with comparative safety as to prin-
cipal, prices are so high that incomes
are reduced in some instances to less
than half the dividend rate. Very
largely this is due to s'melon cutting"
Of the quiet kind. Some of the big
lines are now doing enormous bust
ness, and earning great sums over and
above fixed charges and dividend re-
] quirements. To permit surplus to
accumulate is not always good policy,
unless, as in the case of the Milwaukee,
there is great extension work in mind.
/ To pay increasing dividends to stock
holders is bad. It serves to call at
tention to prosperity and breeds
trouble Hence the frequency Of late
of issues of new stock to holders of
old stock, at par. Thus in the very
height Of prosperity dividend charges
i are increased. Old stockholders re.
ceive extra dividends in disguise, and
should the country recede from it's
present stage Of extreme activity and
prosperity, into a period of COMPARE
tive quiescence, the railroads will be
found capitalized high enough so that
anything they may earn and pay will
not look too big. -
/ The market, in short, has worked
away from the influences that ordi
narily control It is no longer ques
tion with the prospective purchaser
of stock, as to what dividend he vii
receive, but whether or not there is s
tmelon' in sight, A ''melon' may
be an increase in capital stock, as il
the case Of the Great Northern ant
Canadian Pacific, or it may be in some
great consolidation, as that, of the
traction COMPANIES Of, New York, o.
the talked-of combination ,sof all tn
big copper companies into one,
Stocks. cannot 60 up for ever, bu
! they will go up so long as condition
remain unchanged, for speculative
activity is increasing by spurts fror
: time to time, and at each new furry
7 after temporary quiet Of a week or sc
: new buyers come in.
!, The uncertain things are the south
west crop reports, the threatened Goa
+ strike, and the political situation i
Europe where interest is now centere
at Algeciras. Railroad rate regula tior
as a stockmarket factor, appears t
have pent it's force. There is no in
: mediate likelihood Of exports Of golt
r in any quantity.
! All the bulls desire is the maintain
IS ance Of affairs about as they are, an
!, they will run prices up in good tim.
q Already a majority of all the stock
: are high enough on any possible arg,
J. ment Of earnings present or prospe'
it tive, and many are absurdly high o
any argument. Yet few observers b.
le lieve the top is yet. Probably the1
r will be no top until there is first
= wild and dizzy market in which tn
y public will be found carrying the loa6
e but there will be a smash sometim
II When it comes stocks will go bac
n again very quickly to levels where til
9 old standards Of earnings and dividen
: payments will more largely measul
v value.