New-York tribune., 1909-10-24
The Financial World

governing influence.
The Bank Of England has lifted itz in
terest rate again-makes IL . per cent
against pa barely a month ago. This
action was vociferously hailed by Wall
Street spectators as an attack upon
the American security market-whicb ~
the story ran, was in n dangerous pogi-
tiOn. Nothing more ridiculous could Ia
imagined The action OF the Bank os
England has no relation whatsoever 4.
the affairs of the United States. II 4.
largely due to the confusion prevaiIi,,.
In English home politics. The opposirs>
PARTIES in England front a serious crisiz
over the budget proposed by the present
Government, and should that crisis he
come acute to the extent Of a dfssoI,,-
tiOn of Parliament the Bank would Ia
compelled to finance the Government
during the interregnum Of d general eIec
tiOn. Hence the Bank is compelled "a
fortify its reserves. Proof that this
advance and discount rate is OF excen-
tiOnaI and artificial character Is evide1s
by the fact that the Bank can OnIv
maintain it by itself borrowing the free
floating funds in London The sftus
tiOn does not originate from New York
has no connection with New York ex-
cept in an indirect way-the indirect e.
IGcI UtlIk LldL GlEEuldLlhE nOl0GnZ9 IN
London of American securities are
forced to liquidation. Bearing thess
facts in mind the declines in the New
York stock market are comparatively
slight-the evidence Of inherent strength
in the American situation wonderfully
reassuring.
There is no disclosure anywhere of
speculative imitation in American securi-
ties-testihed to by the ease OF the New
York money market in the face Of ad-
Vancing rates abroad There Is dis
closure on every hand of continuance
absolute grOwth-of American prosper
ity. Industrial and railroad companies
alike exhibit exhilarating expansion
Take the marvellous record OF the
sovereign industrial, United States Steel
The statement, to appear next Tuesday.
will show business done and business
booked on an unprecedented scale. From
the point Of view Of actual deveIopment
it is immateriaI whether the dividend
rate be advanced at this particular time.
because 1t is we'll known that IL could
be doubled. and more than doubled, and
still be within ultra conservative lines
The remarkable FecuperatiOn of the
steel business is not a matter OF theory
not a romance Of the iInagiRatiOn-but
d IdCI uGulOlSlEdDlG DE TIE llHEAlDla
test of figures. That steel, with the rest
of the market, has sold of eight points
from its extreme high price reflects
nothing more than the taking OF profits
by speculative holders and the enthUsi-
astic extension of short commitments
by the bear party. Not a single adverse
happening is to be recorded in the steel
business. Not even a solitary threat ap-
pears. 1t is all the other way-COnstant
growth, rapid betterment. 1t is not 70
be supposed that investment holdings
of the Steel shares are in any way al
fected by Wall Street fluctuati0n. The
great bulk of those investments were
accumulated at figures so far below pre-
vailing quotations as 10 render holders
Indifferent to market WhimSiCaiitieS.
And investment holders both Of the
common and preferred-purchase price
cOnsidered-are receiving average dlvl-
dend income which il would be lmpossi-
BILE for them to get from any other
source Why. then. should they be
scared into selling? They are not But
there is an evident disposition on the
part Of new investors 70 take swift ad-
vantage Of every reasonable huctuation
in market quotations.
Through all market whirls steel SHOWS
more stubborn resistance from attack
than any other of the big speculative
issues.
Then. in the railroad situation. how In
spirftine is the annual report OF the
Union Pacific system Earnings from All
sources provide for every fixed charge
and for preferred dividends and leave
surplus of 19 per cent available for COM
mon dividends, while only 10 per cent u
now being paid. How effectively this DIS
poses of silly. scandalous rumors cur
rent last week that Mr.. Hartman had
looted" Union Pacific for the benenI
Of his private fortune That sucn Iu-
mors were actually put forth testineS
to the desperate tactics reSorted 10 oy
a reckless bear party. Union racine
remains the splendid monument or Har-
riman genius
And incidentally what Hartman man
agement has meant is accented by the
startHngly good showing made by Erle
during it's last fiscal year. Gross earn
ings increase materially, net earnings
tremendously more. Striking is the COM
parison with every recent year. Against
the deficit of 100000 for 1908 there
now appears for 1909 a surplus sur
passing S2,5O0,O00. HarFimaniZation
extended throughout every detail or the
Erie administratiOn-the ratio OF oper-
ating expenses running down more tLlsn
II per cent. Close TO miracle working
this Erie exhibit is. Yet in no way or
to any extent is ii anything else than
Just mere Harrimanism.
AS Mr.. Hartman left Union Pacific.
as he left Erie-as natural sequence 20
widespread Hartman methodsvwe haVs
i'm the United States to-day exam pies
and rules governing in practical railroad
policies which are from this time for-
ward bound. perfOrce, to be operative
and the gist of these rules is that rall-
way stockholders are investors and thaI
investors are entitled to dividends
IL would not be surprising to have ths
market open for the coming week az
even further concessions than have been
recorded-for the speculative interests
most active are aggFessively bearish and
will naturally force any advantages they
have already scored. II will be reek-
less trader, however. who waits long
after Mondays opening to cover short
contracts-fOr in the long list OF indu-
entail elements il is not possible 20 nnd
a single one which in true measurement
is aught else than encouraging. m
duStrial conditions wholly satisfactory.
the commercial situation better than fOr
years, the banks OF the country stronger
than ever before in history, and-sur-
mounting all-agricultural cash sur
pluses soaring beyond every precedent
this Crudely stated, is the natiOnal rec
ord And whenever Wall Street aneets
to be anything else than reflection
~ -. ont NJ - pi1pa and IOOl-