The Washington herald., 1907-03-17
SUNDAY. MARCH Il. 1907.
4 Foreign view of Hartman.


Director Hans Schuster, of the Dresdner
Bank OF Berlin, has been giving a New
York paper his views on financial condi-
tions in this country. which in one impOr-
tant respect-that of the scarcity and high
price OF mOney--dO not differ from those
in Germany. There. as here. rapid devel-
opment OF industrial enterprises and the
aboundlng prosperity of the people have
drawn heavily upon the available supply
OF ioanable capital. SO that an era of
money stringency has set in that prom
ises to continue for some time. Money
has been going up everywhere, and can
not be had in sufficient quantity to finance
the worlds increasing activities. Our mis-
take. in Director Schuster's opinion, has
been in setting a too rapid industrial pace,
and in putting ont stock issues at too at
tractlve prices in order TO float them. for
there has not been money enough TO alb
sorb these indigestible securities. Accord
ing 10 this view of the situation it Is
short-sighted, in Director Schuster' >
opinion. to blame President Roosevelt for
what has occurred. lie regards Hartman
and men Of his class as responsible for the
distrust awakened both here and abroad
and commented thus on the Union Pacific
juggle:
Evidently Mr. Hartman abruptly raised the
Union Pacific dividend by per cent al al once
for the purpose Of raising the price Of the shares
10 enable him TO unload. The way Union Pacific
has acted since suggests that large quantity Of
the stock has passed from strong TO weaker hands
Great Northern and Northern Pacific have acted
similsrl5. indicating that AIr Hartman also took
advantage Of the high prices he had ght about
to hqudste his big holdings Of these stocks. Tie
impression created in Europe by such action has
been very bad, and Mr.. Hartman is held more
responsible than President Roosevelt for the lack OF
confidence in railroad securities 50
In spite of the unfavorabIe money situa-
tion. number of railroads have been
able TO float stocks and bonds. among
them being the Kew Haven and Hartford
which has recently placed a S50,0OO.O00 loan
IN Paris. It has been pointed out that
the very roads that have had trouble in
raising money are those whose dividends
were increased in the face of the almost
certain prospect that the funds appro-
priated 20 dividends would be needed for
other purposes, while the more Conserva-
lively managed properties have been able
10 command the funds required for their
development
The assertion, then, that President
Roosevelt has destroyed the credit Of the
railroads is without foundation in actual
conditions either in this country or i'm
Europe. The railroads are in the same
boat with other large borrowers. and all
are suffering from worldwide financial
stringency. Director Schuster believes
that healthier regime is about to set in.
that industries will adjust themselves 10
basic financial conditions. and that ulti-
mately there will be a return to normal
interest rates. And it is certain that IN
the long run railroad credit will be i'm
proved by the check to stock jobbery that
is bound to result from the recent expo
sures, as we'll as by legislation for the
purpose Of securing the rights of the in
vestOr.