Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1909-07-23
Distribution of Railway Stock.

Returns compiled not long ago for %
prominent railway. companies showed an
actual increase of the total stock out
standing of only from 81, 800, 15S997 to 3d.
600, 24S,157, or a little less than per cent.
During the same period the number of
stockholders increased from 211 .069 to 232,
0S3 or somewhat more than 10 per cent
about five times the increase of outstand-
ing stock measured in ratios. The fig
ures, we presume at least for the most
part cover the fiscal year for the rail-
ways that ended June 80, 1905 But even
so they covered not only nine months of
a panic and depressed twelvemonth, but
a period of civic onslaught on the rail-
ways federal and state. Such an attack
reaching all over the country, coupled
with reduced earnings, was the reverse
of favorable to railway investment. 1t is
true that it, from one viewpoint should
have induced selling. and, in that sense,
was favorable to distribution But SELL
ing implies buying and to buying the
condition was, on it's face. distinctly I'M
for in the psychology of Investment, the
owner has the hold on" impulse while
the buyer is apt to be conservative and
timid. Again, during a time of depres-
holder is likely to take up his stock
rather than sell his rights low, and
thus depression to degree, resists dis
tribution. The only real distributive
BILE bonds for stock. But that force has
been minor and modified by the fact that
the stakeholder and convertible bond
holder have often been one.
the situation. The New York, New Ha-
ven & Hartford Co., during the
calendar year 1908 has had no bonds con-
vertible within that time. 1t has suffered
like other roads from the industrial stag
nation, in fact more than most of them
as tapping intensified factory territory. 1t
has been the object of attack by the fed
eral authorities and of both legislative
or i,,Ii ia1 of m MncSanhISpttS g.
attack reaching at times most violent
character. Yet during the calendar year
1908 it's stockholders have increased, as
we are informed authoritively about 1000
or some IA per cent: and in Massachusetts
alone. where a majority of its stockhold-
ers live and where a plurality of it's
shares. as compared with other states, is
held the number of stockholders has in
creased about 800, or more than II per
cent. And no one will contend for a mo-
ment that such a road as the New Haven
with its relatively paltry sales in the
market is in any degree affected by spec
ulative distribution of shares.
In seeking the causes of distribution of
conservative railway ownership against
to underlying and fundamental facts
which. fully appraised, are the most
cheering sign and symptom of the general
railway situation. Timely. which we
been on the side of the railways. The
railways have assumed in the mind of
the investor an institutional character.
AS an investment class they have paid
him well in spite of incidental evils of
"high' finance. Indeed in not few
cases, he has been beneficiary of that
high finance which he may not himself
a fiscal moralist approve. He has seen
also that the railways have been subject
to no such hydraulics as have poured
their floods into the industrials and the
street railways AS an outcome of all
these elements combined the railways ac-
quired kind of investment momentum
that held confidence through adversely
When railway stocks fell the old railway
investor naturally bought them first and
advised his friends to do so. The con-
trast is shown by comparison with the
industrials which, as a whole. have been
much less under civic attack than the
railways. While 25 railways, as stated.
increased their stockholders 10 per cent,
Al industrals. some of them conserva-
tive. increased their stockholders only
from 296 292 to 322,277 or less than per
cent. Railway stock distribution in ratio
was more than double that of the indus
trials and. of course. among much
more conservative and retentive class
Railroad Age Gazette.