Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-05-12


duced TO concrete notwithstanding form.
Were it not for the fact that The biggest
fnanciers and the ablest lawyers in Wall
street have been hard at work on the plan
for weeks and months the plainest state
ment Of what has been done and Of the
status of the project would seem chimerical
An idle dream or the product of unbridled
ina eination. Representatives of the pro-
ready negotiating for the offices at III
Broadway soon to be vacated by c. G.:
Gates & CO. If contaminated along the
lines now being faliowed the new institution
will have for its executive head man
named by J. P. Morgan. 1t will signalize
a unification Of the great railroad interests
and factions Of the country. even as the
formation Of the United States Steel Cor
lions Of the steel industry which were
threatening the prosperity of the nation.
The preferred stockholders Of the Union
Pacific are sttll counting on sharing equally
with the common stockholders in. any dis
tEibution of treasury assets The only
strange tfink about II Is how such an i'm
portant discovery could have heen made at
such a late day. There il 00.O00 900 of
ssnlan sPaeinc preferred d. n, n a The
he issued when the directors feel like it.
This is the 800. 900. 900 that Mr.. Hartman
had authorized some time aso Just because
stock some day to buy the Atchison. the
Jllfncis Central or some other near Union
Pacific property.
If; the theory of the rights OF the pre-
ferred stock to participate equally with the
co ,.mnn on any melons is correct the sharp
fnanc'ai students should not overlook the
fact that the wider the melon is distributed
the sms Her tho pieces become If. for ex-
n~rsie +he TTnion Pacific treasury cuts I'M
S1CG 0Ne OAA of assets among its 000On0
shares 80 stock each share of stock would
geS so piece of the melon. But if the
melon had tn be divided among the COM
mop ard nroferred shareholders alike. then
this Sl60 00a O0O would be cut uD into 5000
roo nAces, giving each share nf stock only
$s3.as IL. If the extra St60 00000 OF pre-
ferr"d stock were issued before the melon
only s25. And SO 1t is seen that while this
Ingenious theory Is very bullish on the
preferred stock. it is actually bearish on
the common stock.
- - tH...
The continued liquidation in New York
Central. the premier American railroad Sc
curity. arouses comment. New York Cen
trails low price in the March panic was
liz. Since then a quarterly dividend of
1O-point recovery in April, but since then
it has been sagging back again, until now
1t is in the neighborhood of the March
panic level. Meanwhile Union Pacific has
had about 30-point recovery. with only
small. setback The Central's quarterly
statement of earnings may be sufficient ex-
PLANTATION Of the weakness of the stock. 1t
is said that banking interests connected
with the property have made no effort to
support the stock. and that they are al
lowing it to find its own level Some i'm
portant holders of New York Central say
that they are scaling down their holdings
and putting their money into railroads ir
other states where there is less talk Of re-
form. There Is feeling UP the state
among thinking people that the holders of
securities of corporations in New York
state have much to fear from Gov Hughes
and his followers. In the panic of 1903,
when attack was especially directed against
the. New York Central. the per cent stock
was hammered down to 112&. This was the
cent issue. Its income return on that price
was a little less than AS per cent. This
week the stock. as per cent issue, sold
at 1121s. or on SD per cent basis-that is,
just equal to the panic price of the per
cent stock in 1903. Money, of course, is
'dearer now than it was in 1903. and rail-
way credit is not as high. but the increased
cost of money ought not to have so dsas-
trotls effect on this stock.
q -
New York Central's top price was 174x in
the'halcyon days of 1901. Its income return
then was % per cent. But in those days
we didn't bother much about income re-
turns on the stocks of the big roads occu-
plying strategic positions on the American
railroad map. We were all ready to be-
Iieve that any morning we might wake up
and find that the Great Western had swal-
lowed the New York Central or the Wabash
had gobbled up the Pennsylvania. The
Union Pacl1c. at last accounts. owned 142.-
500 shares Of New York Central that cost
$19,6OO.OOl At 112h this stock is worth
SIG. 900. Considering the period Of high
prices when the Union Pacific purchases
were made. from July to December, 1906.
this loss of IS per cent In market value is
not very large. Has the idea occurred to
any one that Mr.. Hartman may be SELL
ing some of the Union Pacific treasury hold
ings-converting them into needed cost? A
holding company for these securities OF
other roads will not be needed il they can
be sold at a fair price. Still, Mr.. Harrf-
man Is too good a railroad flnancier to be