New-York tribune., 1908-06-21
The Financial World.


dent-is the further disclosure Of disposit;an :.
go right along waiting and watching thinz.
ntlcaI until there is action by the eonvenft,r :.
Denver In the event Of Mr.. Bryan's ro--,--
tion. Wall Street villa in all likelihood eor.r..ss
and act upon the conclusion. that the rail-,
campaign is to go by dsfault-that Mr T,..'
election is merely a matter Of becoming an -
derby record.
In the present mood Of the financial 7r,.,.
the nomination Of Mr. Bryan viii probably hav.
the immediate effect Of inducing activfsy-sa.se
in general business and unarket-v7isa- 80
upon the belief that Mr.. Taft's election viii -
merely be assured but that as natural sann.-as ss
thereto we VIII nave trade progressiveness ava
good times
One depressing factor has come into the ,,.-
ket this week. We have dividend red1ctfo, ,,.
prises. One of these Is presented by Louizvfr.
& Nashville. That railroad cuts It's rate bslo,u
where 1t made declarations when availabIs a.,
tribution revenues were not so large II :.
course. highly cOmmendable 20 pursue hna,cs,,
policies OF conservatism; but such policies A.
not commend themselves to investors when tba,.
proceed by fits and starts. when they seen, "a =.
construabie as the offspring Of passing hystsria
a sorrier case than Louisville & Nashville /,
presented by the Cleveland. Cincinnati. chscsr,
& ST Louis Railway. This property's eor,ro,
performance in many ways is curious. II is
the face of a continuing accumulation OF So
plus-the execution of a policy which o,a- .
period of many years has taken from currar,
earnings large sums in the way of arhitrary a.
preparation TO build this surplus up And va.
by year. there has been clear exposurs AZ ~.
fact that the insiders OF the COMPANY those vh.
actually control have been Ia the oDen nnarEs.
and otherwise buying the stock TO put into es5a
ciaI holding interests. The Lake Shore Cor,nar,
has bought far ana away beyond a majority ~
every recent stock issue Lake Shore purchases
have been, moreover. upon the basis OF r,,,,
tanned dividends. Within barely year nas.
Lake Shores investment in Big Four stock has
run into millions on millions Of dollars around
the stocks par value In far as Controllin-
elements in the making and executing OF BE
Four policies are concerned, Lake Shore Interests
have been not merely fully informed they hsvs
been dominant-Big Four's policies have has,
actually determined by Lake Shore
Upon consideration Of fact like this-srs
touching 10 there can be no matter Of doubt
there may be good reason for sympathy in critt-
cisms now heard from most conservative quar-
ters. In the view OF some such critics thers
would even seem to be indication that the Iaka
Shore domination is exerted % bring about the
complete actual absorption Of the Big Four svs-
tenn upon a bargain counter basis through the
working of stock market bear campaign. Hav-
ing bought large volumes Of stock az 100 Lake
Shore diplomats may be pleased to rake in other
large volumes at 80.
Whatsoever the facts. whatsoever the trustss-
ship dereliCtiOns. there is certainly extraord-
%
important railroads Of the prosperous Middle
West can be so suddenly whirIed from prosper
ity into penUry. We are Tegaled with much
frequency with representations Of the evil ef-
fects that follow the payment Of dividends un-
earned. but on the other side, this Big Four
instance suggests that there can be inpostons
equally oppressive when dividends earned are
arbitrarily withheld.
IN this Big Four example cruel experiences
are disclosed. Stock Exchange firms Of the very
highest character were induced 10 put investors
Ie-1 f1f.- 1a-~d f-
character OF the conpany's statements rs profit
exhibits it's established dividends. They had
counseIs to buy which came from ths very
highest official quarters Above all, they mad
the complete example Of the Lake Shores con-
tinuous absorption. Yet without approach 20
any Ineligible explanation. all dividend income
is overnight exterminated- One OF the htghest
officers of the company says: %of course "s
could have paid the dividend '-indieatHs that
earnings warranted dividend
The exhibit Is bad 1t demands expa1anon
II will not be surprising if the courts are asked
to do some auditing Investment confidence
sava geIy attacked by this Big -Four incldent-
and it's Lake Shore relationships
A fashion which prevailed In times past nay
have sudden change-as formerly cynical peopse
felt warranted in questioning the correctness
and good faith of corporation figures tsuspecuns
them of expansion) so now it may come to pass
thst the figures Of the same corporations may
come under suspicion from the very opposite
angle. so popular has it become to make a poe,
corporate mouth talk dreaTy pesslnlSn anu anu
make slaps at any prosperity prospect -
CaIculaturs will not believe the grewsome laies
which so many corporation managers So T-u ~
think IL necessary to recite "f'lnlSnlhs ne
dore Roosevelt has finally become an ART e'@p-
Grated
Basic elements In the situation are aiTnoS'
wholly on the right side. That we are gong ="
have plenty of money and cheap money Is az
sured. Bank dividends may not sweI oID'
the ensuing twelve months; but we are sOiH'
TO have what is normal in the money nalAs'
the AIdrich bill assures this much
And as TO professional sentiment IN wan
Street. a canvass of the really big houses OF lA'
Stock Exchange discIoses that there IS very s'-
orally a feeling of confidence in aPproaenlAs III.
provement-a firm of the consequence OF \
Housman & Company. for example eurl7h"'
advising clients in this wise
We are inclined TO take optimistic view view ~ =
the outlook of the market for secuEltleS 49,.
Iieve that there is the pOSsibtilty, ana, III -, -
the probability. Of a great revival IN tne Jou I
try's trade when there is an end OF PoHIlCa.
certainty and especially in view or the oOuLl-s5 5
crops which now seem TO BE- fairly Wei a4,s aSsetT
The chances point 70 a freedom from the 49, 80
disuuieting political and personal matters tr,s
have afflicted the COuntrJ Tor the I@St y, "a
years or more. Last years panic aIlel a,,sI a.
to small extent OF a SentlIheiit dLlI E-,nal
. character. and with the removal oI inc PSscn
equations there would seem to oe no te--,-
why the business of the country ana lIe HIa 80.
for securities should not enjoy asain te Sss9
fits and the blessings which were iLitL yStTsC
uDon the first election of President NiC r-!ss.5
since which time we have not had MAINTAINS ls
bull market We have had big speCuIe1 IL -
based on increased dividends and proJs 49, ~ I'm.
road consOIida tions: but the market or tHe =,
ing wear will be a natural market. eaSsU %
sound foundations and improving conci'o'~
Union Pacifc's bond issue continues u -,
speculative interest For some red'''' II,
seem to be many people who douoI 'i-' -
official announcements of heavy oVeF-Suu i.s i, a
ZION to the issue Quotations keep sagglns ~
-. - - -. 80, n,1ite 20 Indicate an ~