Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-04-28
Financial News Letter
BY W. G. NICHOLAS.

NEW YORK, N. Y, April q, 1907.
From Washington Wall street gets dis
turbing rumors as to what Mr.. Roosevelt
is going to say in his Memorial day speech.
The President has been talking this speech
over with his advisers, and naturally there
are leaks. Wall street is not SO much dis
turbed as to what the President is going
to say as the way he is going to say it.
In the opinion of some far-sighted rail-
road finaneiers the day has gone by when
the shareholders in the money-making
roads expect to receive large profits in
excess of regular dividends. 1t is said Mr..
Hill, who has his ear to the ground, has
given up his idea of declaring an extra
large cash dividend on Northern Pacihc.
Mr. Hill has always said that per cent
dividends were about all the people OF Min
nesota and the northwest would stand LOT,
and his aim has always been 10 dlstriDute
the extra profits of his Great Northern In
rights. Now the Minnesota authorities are
conducting campaign against this methou
financiers say that Mr.. Roosevelt's agita-
ton against large profits in the railroad
business has resulted in the building up OF
q public sentiment against big DIVIDENDS.
+
Some of the shrewdest constructive finan-
cers of the country say that the value OF
railroad stocks for the time being must
not be gagged by their earning power. Inc
stock of a road, they say, that pays d
per cent while earning 16 per cent must
be valued from the 6 per cent basis. II the
road is earning two or three times the
money needed to pay it's dividend, then II
invites itself to the attack Of the reform
ers who want to limit the amount OF proht
that can be made in q successful man
aged road. Last winter some OF the leaa-
ing railroad stocks were selling. not on the
basis of their dividends, but on the basis
Of their earning power. This, say some OF
the conservatives, could not go on in the
face Of great nsi Stocks
merits Reading is an exception. Al
though per cent stock, 1t Is selling
PLANTATION is made that the Reading, oy
law, is going to be forced to make a large
distribution to IT'S shareholders when lts
transportation business and it's coal bust
ness are divorced.
Basing the value of railroad stocks in this
fashion, the wonder grows how Lacka-
wanna can continue to sell in the neigh
borhood of s475 a share. The stock is pay
ing 10 per cent regular and 10 per cent
extra, and an impartial study of the roads
figures of operation show that the stock Is
earning in the neighborhood of 60 per cent.
The only way the LackaWanna can dlstriD-
ute the same profits to its shareholders
without making itself target with ~ per
cent dividends is to water It's STOCK Inc
company might give four or five shares
for each share now issued. But this would
be in direct antagonism to current puphc
sentiment That declares stock watering a
crime.
One of the things that tends to market
dullness is the refusal of the public to buy
generously into the blind pools which have
become such conspicuous feature of
stock exchange manipulation of late years
There is a spreading desire on the part OF
investors and spectators for more dennlte
knowledge than is now obtainab!e ABOUT
the actual conditions of such blind pool
stocks as Amalgamated Shelters, United
Copper Standard OIL and many Of the one
man railroads, such as Missouri Pacific, St
Paul Great Northern, Northern PACING
and Wabash. There Is noticed. also, an
increasing desire to look behind the Stand
ard Oil curtain. Stock In that corporation
is much more widely distributed than most
people think a semi-offlcial statement hay-
ing been out recently that there are nearly
5000 share owners In that corporation 1t
is popularity supposed that the overwheim-
ing control of that company Is lodged with
a small group of not to exceed dozen
men This appears to be a mistake The
insiders seem to have found way to dis
tribute a great deal Of their stock during
the last two OF three years at prices which
look almost fabulOusly high. especially In
view Of the fact that not twenty people
in the United States know what the real
values and assets are.
The Amalgamated Copper Company has
paid $4,000 600 in dividends since it was
brought out in 80 The Amalgamated was
a product of the Industrial promotion fever
of the closing wears of the century Just