The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-04-30

Southern Pacific Dividend May BE
Raised in AugHst-Rain ia Wheat
Section Proves "a Boon 10 the Bulls.
New York April 29.-Frequent repeti-
ton and the absence Of anything like Off
cial confirmation deprived the story about
the formation of a Union Pacific holding
company of much financial influence il
might otherwise have had as a bull argu-
ment. and more, a reasonable-if less pic
turesque-one was found in the fact that
the price Of the stock was, relatively 10
the rate of dividend paid. materially
lower than that Of other prominent rail-
road issues. To give point TO this argu-
ment it was asserted, rightly or wrongly,
that large interests in the company had
accumulated IA heavy line Of the stock.
practically corralling the floating supply.
and intended to continue the upward
movement until the price reached an
equality with that of Southern Pacific.
AS Southern Pacific was quoted above So
when this argument was set forth, the
inference the traders were expected to
draw from il apparently was thai Union
Pacific would cross 10 on this movement.
or, IN other words. would still rise % or
- points higher. On this modest predic-
ton the stock attracted increased atten-
ton from the traders, and the shorts be-
gan 20 show unmistak2ble signs Of ner-
vousuess, which led TO their precipitate
covering movements in the last hour.
It does not appear that there IS any
real reason why Union Pacific should sell
at double the price Of Southern Pacific.
The rate of dividend OH the former is.
OF course, double the rate paid on the
latter, but the earnings Of Southern are
inc. easing 50 much more rapidly than
those of Union Pacific that the ratio now
eX sting between the rates paid by the
two roads viii hardly continue. Il would
surprise no one If the Southern Pacific
dividend was increased 70 6 per cent next
August. and as far as can be Judged from
the earning for the eight months ended
February y, Il looks as If this road could
as easily AFFORD 10 pay per cent on the
basis of the current years earnings as
Union Pacific could afTord 20 pay 10 per
cent.
Two or three weeks ago attention was
called 10 the fact as something more
than passing interest that buIlish adylces
were received from the European centers,
particularly Paris and London, on the
Hartman stocks, especially Union Pacific
II was az that time that the really sig
nificant buying was in progress. When
these advances cabled over Union Pacific
was selling az about 49, The ad-
vance since that time has given Op-
portunity for a handsome profit. al
though the question still remains OF
how far the large interests have succeed
ed IN realizing their profits in such
market as has been seen lately. There is.
OF course, no evidence that they have
even attempted TO do SO.
At present quotations Union Pacific
Yields nearly 6s I.F cent on the market
prices. This IS far above the yield on the
Hin stocks, St. Paul. Pennsylvania. Balti-
more and Ohio. and any other high-cIass
active railroad issues. II was contended
not long ago that one of the worst fea-
lures Of the market was the low level at
which Union Pacific sold, relative 10 other
prominent stocks. and that IL this could
DE- corrected the general effect would be
Since that time the advice in
European messages and the comparative
lack Of advice elsewhere has gone far 40
establish the desired equality.
As 20 the Significance Of the news from
the wheat section. there was only one
rain in Kansas and Nebraska
could not fail TO be of substantial benefit
TO winter wheat But there was "a differ
sncC Of opinion as 10 the effect Of the
a l-r.f
made a great parade of strength in
very limited number of issues, and the
bears said that if no better response
could be made 10 news that was favorable
to an important degree, all the enort made
at the end of last week to pat prices up.
Ia anticipation of q reaction in the cup
rent Of damage rumors, was labor In vain
That the change in weather conditions
IN the West was a factor. it would be
ole TO deny. but what the bears wanted
10 accentuate was that if the bulls, max
ng their best effort, could accomplish so
little on such good news. there was no
great encouragement for a general and
sustained upward movement in prices.
About the only argument in advancing
pennsylvania was that the regular semi /
annual dividend of 81 per cent would be /
t-tAtAEA LltaS Weth5 ana as the DOCKS /
would close soon after the declaration, /
the stock selling ex-dlvidend looks cheap.
An attempt was made 10 stimulate in 1
crest in the United States Steel dividend
by a rumor that certain stockholders had
Urged the directors to increase the rate Of /
and that some members of /
he board were disposed to give the mat !
er favorable consideration. The story |
lid not receive much eredenee, the pre- /
railing expectation being that no change !
would be m2de-at least, at this period (
Next to Union Pacific. Reading was the /
main feature Of interest in the market. 4
he same clique being active in both stocks /
There was d disposition. however, to re- /
ard the operations in Reading as of much I
ess importance than those in Union Pa !
iflc.
TIVE CTnNV BEADzrTc