New-York tribune., 1908-03-22
The Financial World.

York Central has cut its dividend rate IA.
first reduction is not severe-in all likelihood \.
will have TO be followed by a change mora
drastic. Some other corporations fall in I'm.
Sbrunken earnings have naturally the sequsnc.
Of decreased disbursement capacity Largely
90 far this action is taken BY industrial prop
critics: only feu OF the important railroads arr
vet on record--though there can be little dous.
that before long the list must be extended
New York Central dropping from rate Of
per cent 70 :, per year is only IN degrees dr
ferent from most others in its class II is din
cult. indeed to discover more than two OF th-es
groups wherein the chief systems of the coun-
trv can safely proceed with dividend distribution
eaual to. or fairly approaching. what until COW
has been normal. Pennsylvania is not yet n
the New York Central situation. but IT'S fort
unes are not all sunshine--its disbursement,
commitments In fact. far outrunHiny what fhs
Vanderbilt lines have vet essayed- And ths
relatively subordinate Baltimore & Ohio sys-
tenn has similarly to face net earnings destroyed
while Atchison In the Southwest, Louisvils &
Nashville in the South and New Haven shs
North are likewise representative in the making
OF doIeful records Properties like these of
the. higher class-have largest and s'Irest
sources can far longer Withstand rnisforrunss
drains than is feasible for the general list %
railways. Missouri Pacific. Southern Railway
Seaboard and companies OF such sort are much
more conspicuously vulnerable
Rur-as has been continually the thsory ~
this review-there is something very dSsren,
from panic warranty IN the making Of nsces-
eary change. in the facing or new conditions ry
the pursuit of policies that are conservative
What may Immediately be somewhat dinncul.
to comprehend. however. is such market action
as is displayed by New York Central IN searsl
to lowered dividend-the stock actually selling
Yesterday on ) per cent basis higher than tia
average Of its price at per cent IN the week
nrecedfus OF course there are reasons a-pleafY
quoted by way of explanation: the short n
terest was large and il hurried 70 cover, pool
IN heIp the property's credit is discussed Bur
.xpIanation. Of this sort are not such as inrsh-
Sence will long consider What more naturally
would seer1 TO be Illuminating IS thar the Ear-
ket as a whole has for long tine past seemed
virtually sold out: investment interests hs-s
got over being scared. compulsory hqlldatlon
ended. and supplementary TO this Fundamental
influence is the fact fthough We nave not nssrd
,,,,,cb of the element 1ately) thar absorption Q,
stocks in small blocks Is still continuing largely
as evidenced by the transfer boaks of every i'm
portant corporation having New York STOCK E1-
change connections. Here is foil 70 sporadic
..,,.xs oryse. against short sales oy pro-
fessonaI speculators
,,,on the nuu side Bearishness has played
itself into unnteresting inenscuYeness- fe's
.,..,,,.rrv n NAV be that these immediate IN
cu.,ees helping quotations may have matariai
,,o5iecs+fon because Of what the necessary rev
di,-faend poIicy is hound ~ be Sentiment may
Los, n < per cent stock at parity for Whis
nth what has been fts market value az o Per
,.,+ ,ut as new dividend days approacn sen''-
rr,a,+ is not unlikely 70 he chilled IerselF
n.o..d while conservatism may enforce for
80 ~ our great properties lower DIVIDENDS "
.. ,.-,,,, ~ he expected that ths investing COM
navine az much for smaller olNlo-hI 'xas-
70 Is,sar Yield commanded II IS cniy L-Lr Aa.
-.r+ of common sense TO loon the =
80. ard their influences in tEe Iace- -,
bounds. UndouOISdlEs y I4lr- a.
.,.Eetior that recent low market prices Lldvo ~, ~.
most stocks discounted reduced cd iILL-s r5ss-,
Iae5 IiSt divider,tis for sentimental Co11sidera
lions have through months -ePeta,Sd -s. a-
rhoJl>- IN favor OF the bear slde OF 'tle i-i -,
80 g asSressive-even TecklesS-ndNe 0.e"
Sono. of the raiding performances OF ~
nressfonist coterie that intrinsic NaIue7 ne ns
-, ;pnored In this manner OF arguIfehIattga.
.air-minded critics generally VIII dSiee, az
uba, reasonable students OF the HldIASt "
49, .ra Iees hear in mind ia that there HefeT
anv lasting period current quotations kept a.a. ~
Fror, interest WELD. However lnIeTIupt1u u
nroerar,re NAV be temporarily III t4iS IN
1ricss are never able 70 escape the measure
nent of Weld. A stock is worth vhaI II salL:
Tbat II navs or is able to pay II - an af,
fcisI market that drifts away from rnls s'ahu-
ard.