The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-07
FINANCIAL NEWS
AND COMMENT
Union Pacific Announces Dis
tributiOn RumOrcA Last
Summer.
DIVIDEND OF B. l. O. SHARES
Stock Market Feverish Most Of
ScssiOn--Strcngth at
the Close.
dividend OF B. l. O. SHARES

Further action IN the direction OF I'M
doing some Of the achievements Of COR
poration finance in the past decade. for
which necessity. reason or excuse no
longer exists. was announced yesterday
In the decision Of the Union Pacific direc-
tors to distribute to the common
shareholders of the company the Balti-
more and Ohio common and preferred
stock In the Union Pacific treasury. n
large part of which was recently re-
ceived from the Pennsylvania Railroad
in exchange for about third Of the
Southern Pacific stock held by the Union
Pacific until compelled to diveet itself Of
| IL last year
Thero is no clear reason why the
latest episode Of this kind should be
otherwise than favorab,y regarded. al
| though in tho case Of the Union Pacific
! there is nothing to show that IL In
dicatcs n policy TO he followed with re-
| spect TO other Investments II, properties
not connected with the system. Whether
or not the Union Pacifcs action liz sig
! niflcant OF further similar developments
| IN other railroad properties Is Of course
IL matter OF conjecture, although the A.
ns ncial community Is now sufficiently pre-
pared by recent occurrences to expect
| continuing rearrangement of corporate
I affairs to meet the situation which has been
!
lie sentiment
| According to the terms Of the pro-
posed distrlgution the Union Pacific COM
mon stock Is to receive about S12 a share
| in Baltimore and Ohio preferred, $3.50
a share in Baltimore and Ohio common
| and 81 cash. The investment return
| on this dividend liz reckoned at something
more than So a share for Union Pacific,
| and accordingly IL IL announced that the
! Union Pacific dividend will be reduced
| from 10 per cent. a year to per cent.
However calculated the distribution seems
| to be equivalent directly to n dividend of
anywhere from $50 to 500 n share
| on Union Pacific. and the presumption IL
! that as an per cent. stock Union Pacific
is not o,ervalued at going prices. which
include the projected distribution.
There is much curiosity as to whether
or not the Union Pacific preferred share
holders and convertible bondholders will
offer objection TO an extra disbursement
which does not recognize them. Fur
years II has been mooted question In
Wall street as to the status OF Union
Pacific preferred in any such course
has now been decided upon. The pre-
ferrcd stock had an inordinate advance
IN 1909 on the segregation rumors which
accompanied the rise in the common
shares to the highest price at which
they have ever sold. At the same time
the contention is made that the present
cUtFlilE OF tOT1UlOn StOCk is ueTlNtU SOIeIS
from the accrued surplus to which the
common shareholders have at all times
had an exclusive title. Moreover II IL
pointed out, as confirming this theory of
the distribution, that tho regular common
stock dividend Is TO be reduced In pro-
portion to the disbursement from surplus.
This reduction was foreshadowed last
autumn in statement issued by the
directors when II was admitted that some
scheme OF the kind now adopted had
been under consideration.
| Tho quite definite and explicit assur.
anc-s of last summer relative to the
purposes OF the Union Pacific manage
incut have now been made good, but
/ yesterdays stock market accorded "a
peculiar reception to tho fulillment OF
| promise For several weeks past ruinors
had been current that In January the
! postponed distribution would be effected.
| but even Us !a:o rs Monday. when the
| rumors became more emphatic they were
/ treated with the indifference bred OF
! familiarity. TO all intents the announce
ment around midday yesterday came N
n general surprise. although In q way ii
had been foreshadowed by the pronounced
weakness OF the Baltimore and Ohio
stocks in the forenoon under what was
! clearly well informed selling. Tho first
disposition ~ the stock market commu-
! nifty WAS to press stocks for sale all
/ through tbs list on the Union Pacific
4 News, 'Te DcIHE III n
speculative sense the probable objective
OF the upward movement since the middle
OF December had been attained.
| Until we'll into the afternoon the whole
list, from the opening Oil. exhibited
great deal OF feverishness. and there was
| obviously most extensive proht taking
ana no little speculative pre- ssure. Never
theless tho market took the selling well.
and although the last hour was an active
/ period the close was at an average
| OF net gain. with many substantial adj
vances retained under tho influential lead
ership OF standard issues like Great
! Northern, Union Pacific Southern Pacific,
Reading and United States Steel. with sup
porting strength in specialties. A feature
OF the carly dealings was buying BY Lon
| don. which. according to report, especially
favored Southern Pacific.
Wall Street attention was pretty thor.
! oughly centred on the matters already
| discussed, and indeed there was not much
other news calculated to attract notice.
| Foreign advices were In the main
| favorable. although London reported
another fizzle Of new financing, the under
| writer's having TO take 90 per cent. OF
the New South Wales I per cent. loan
which had just been offered. The domes-
. tic news budget was meagre in the main,
although, AZ an illustration OF the new
| ideas which are oil AIMING IN business. the
decision of the Ford Motor Company to
distribute half its profits annually to cm-
ployees was deserving of more than pass
! ing consideration. So also was the
! evidence that tho New Haven railroad was
making progress IN its negotiations with
| the Federal AttOrney-Tereral tor settle
! ment of its differences with the Govern
| ment, and 30 was tho support given by
the Illinois Manufacturers Association to
tho railroad campaign for higher freight
rates in the East.
neyalonrnpnfQ In HDfhAS
striking. The local market for credits
continued to rei,., the call accommodH.
ton renewing at so per cent. with
high rate OF 4 per cent. The receipt of
$500 O0o gold from canaca coinclded with
the persistence OF rising sire myth In FOR