The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-03-26

York increased their Capital by stock
dividends paid for out of the surplus,
something which several of the banks
did after the national banking law was
modified four years ago. there were a
number of quotations for bank stock
in excess of a thousand dollars. One
of the national banks, still specially
favored, according to common report,
by Mrs. Hetty Green, at one time
found its stock quoted at approx
mately four thousand dollars a share.
This high figure represented a very
small capitalization of about three
hundred thousand dollars upon which
stood large surplus of approximate
ly five millions. That surplus had
been earned by patient and persistent
applying, for long course of years,
of the profits gained by the bank to
the surplus account. The stockholders
were in every instance men and wom-
en- of great wealth. In that bank Cor
nelius Vanderbilt received his train
ing. It at one time led the banks of
New York in the amount of deposits
and the size of surplus. The stock
holders did not need the dividends and
We're never disposed to criticise the
policy of the bank, which was con-
centrated upon turning over earnings
to the surplus. When the bank in
creased its capital by stock dividends
paid for out of the surplus the mar
ket price of the stock was CORE
spondingly depreciated.
A Vanderbilt Bank
Another bank of New York promi-
nently identified with Vanderbilt and
other railway interests followed for
some years the policy of applying
practically all of it's earnings to the
surplus account. Gradually the sur
plus grew and was itself able, through
the earnings which the use of the sur
plus in the banking bushes made pos
sible, to show such increase that at
last the stock of this bank was quoted
little in excess of thousand dollars,
and a considerable block of it was at
one time sold at that figure. But three
years ago this bank increased its cap
ital from three hundred thousand to
a million by utilizing a portion of the
surplus to pay for the new stock. And
the market quotations for the stock of
of this bank fell to about four hun
bred dollars.
Something similar is what will hap
pen when the Standard Oil company
of Indiana distributes it's new issue of
stock amounting to twenty-nine mil
lions. The company will then be cap
italized at thirty millions and the ac-
tuaries have figures that the stock will
commend a market price of about two
hundred.
The International Harvester.
Should the International Harvester
either because of a decree
of the courts or through voluntary ac-
ton, be dissolved and the subsidiary
companies resume condition of alb
able to presume that the stockholders
of the Harvester company will meet
with the experience which is now the
happy lot of the stockholders of the
old Standard Oil company. For ac-
cording to estimate that is practically
there will be something
like fifty millions of assets to be d.
vided among these subsidiary COM
panies. A division of that kind should
tend to appreciate greatly the value
of the present stock in the Harvester
company. 1t would, however, be as
foolish for any one to speculate in
Harvester stock as it has been fool
ing, possibly, for small profits except |
ng, possibly, for small prf1ts. in the |
stock of the old Standard OIL company |
or in that of any of the subsidiaries. |
For the stockholders know as well as |
else what the value of Har-
vester stock will be in case there be |
dissolution and they will be sure to |
demand a price which will represent
the division of the assets of the Har- |
vester company.
There are number of Industrial
Institutions the market value of whose |
stock is purely a matter of guess
work. One of the greatest of the so /
,alled industrial trusts, one which has |
to conduct it's business so |
'ar without attracting the attention |
IF the government, and, in fact, with |
out any comment excepting that it is !
selling it's products in foreign lands |
charges for like products in this coun- |
ry is fortunate enough almost never
o have any market value fixed upon |
is stock. The only occasion in which |
line, so to speak, can be secured |
With respect to the market value Of |
his stock is the rare offering of a few |
ihares at public auction to close out
In estate. The stock has then COM /
handed about six hundred. The COM
1any would be very glad if a sale of i
he stock could be secretly made, but |
ale of securities by order of the court |
,annot be carried on behind closed /
loors.
The New york Central Railroad
company, which is the owner of all
,ut about four million dollars worth |
If the stock of the Lake Shore rail-
Dad, may have to pay a phenomenal
price to secure that stock, for it pre-
must be secured if the con-
emplated unifcation of the New York
Central and Lake Shore Railroad
takes place. But the bar
rain, whatever it be, will be conduct
d behind closed doors. There will be
10 stock exchange record of it, prob
bly,; the whole amount is, relatively
peaking, only a trif1e, and even
hough as much as a thousand dollars
! share be paid that would no more
epresent the value of the stock than
lid the offerings of a thousand dol
ars a share for Northern Pacific stock
t the time of the corner Of 1901 re-
lect the real value of that stock.
HOLLAND.