The Birmingham age-herald., 1911-03-12
N. Y. CENTRAL HAS STARTED THE PACE. General Cuts in Dividends
 Expected BROWNS STAND WEAK Stock Market Has Paid Very Little Attention to the Sensational Stories of Trouble in
 Mexico
BROWNS STAND WEAK
BY w. c. NICHOLAS

BY W. c. NICHOLAS
 New York. March 11.-tSpecial,)- New York Central having set the fash ion, other railroads may be expected to cut dividends. Several roads ought to have done this a good while ago, and the price at which their stocks are now selling has discounted the event. Baltimore and Ohio, St. Paul, Great Northern, Northern Pacific and several other important railroad systems seem to be scheduled for this action. Even Pennsylvania Is not exempt from that classification. The great bulk of a $200,- 00o,00 investment in plant during the last three or four years Is not earning per cent, and 1t may be years before commensurate revenue will come from that money. Over s10o.0o0.oo0 is rep resented in the Pennsylvania terminals in and around New York. and that according to estimates is earning less than l per cent, although there is only hay basis at best to ascertain just exactly what the revenue from that source may be. It may show up only In the grand total. the same IS the re-
 
 department store.
 In the case of New York Central, 1t is notorious that the main line has not been earning its share of the divi- dends for a long while. Stockholders are paid out of the money earned by the Lake Shore, Pittsburg and Erie and other profitable subsidiaries. Lake Shore Is paying into the treasury of the parent company IS per cent on the stock and earning considerably more. The system might make a better re- turn to its stockholders if 1t were not bled so mercilessly for the benefit of inside enterprises like the Merchants Express company, which is a barnace fastened on to the big company for the great benefit of insiders. It saps the parent trunk to the extent of good deal more than s1,ooo,ooo a year. which might sad should go direct to the whole body of New York Central sharehold CTS.
 The tone of the explanation made by President Brown for cutting the divi dend from per cent to 5 per cent is peevish. It has made bad impression In Wall street and upon the public. It stamps MT. Brown as a rather narrow sort of a man and everybody likes to see him measure up to larger stature. He has been doing a good deal of talk ing lately, some of 1t what might be called good stuff" and some of it be- tokening littleness not looked for from such high positions. MT. Browns thin ly yelled attack on the interstate com merce commission and his attempt to shift the blame for the dividend re- duction upon that body instead of talk Ing his medicine in manly fashion Is one of the things generally complained of. It is looked upon as weak and an evasion of responsibility not called for under known conditions of inside management. New York Central has long suffered from dry rot due largely to abstentee management. MT. Brown was going to correct all this and be Johnny on the spot" but he does not seem to have made extraordinary progress thus far. However. he may grow stronger as he grows older.
 i From the way the market received the New York Central action 1t would appear that nothing need be feared from a general housecleaning along the same lines If there has to be whole sale dividend reductions. as the tape WOulQ lnulCdlt. tIcn IL Hdu DclltT Dt over and through with. Such a move would create neither surprise nor alarm. The market Is fully prepared for official action and nobody is going to be harmed. Such. cut would shift proper share of, increased cost of railroad operation upon the shoulders of owners where it belongs, just as 1t swould belong in a private business es- tablishment. When mercantile estab- It,1.,x f.le ~,aki i,,n l ci r 1t does not ask government aid or a Congress appropriation to make up the loss. Why should the railroads?
 The market has taken with strange indifference the scarehead newspaper reports of the spectacular military and naval demonstration toward the Mex ican border. If it had been directed by MT. Roosevelt instead of by MT. Taft the stock market would be In a state of seething excitement by this time. There would have been all sorts of talk of an immediate invasion of the south ern republic under the pretext of pro tecting American interests and assum- ing police control of the country. The papers would be fult of annexation gos- sip and stocks would be Jumping up and down in wild disorder As 1t Is. the stock market pays only slight att
 
 tion is general that there is neither bloodshed rapine or conquest in the demonstration-that it is merely show of power for peaceful effect upon the discontented population of the Mexican republic designed primarily to help President Diaz to maintain order. The United States, Great Britain, Holland, Belgium and Germany have propaoly s2,O00, 100000 invested in Mexico and in- vestors have sublime faith that their interests will be safeguarded either by this country acting alone or with the hearty backing and coop peration of the other countries. A protectorate over Mexico is even talked of. and with en- tire calmness. We have underwritten Cuba and the Central American coun- tries, why not Mexico? The whole thing appeals to Wall street as alto gether natural and something not to run away from or get excited about.
 That the stock of American Sugar has not broken all to pieces under inc weight of years Of costly ntigation' inside robbery and the forced restitu- tion to the government of many mill lions of dollars in stolen money Is one of the wonders of the hour. The stock has taken blow after blow in spirit of stolid resienation and only a small fracr tion of holders of record have gotten out. It remains to be seen whether the official announcement made this week that reserves had to be drawn upon heavily to pay the current dividends will produce important effect. About 7b ner cent of the stock in American Sugar
 FOR SALE
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