The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-05-03
Prospect for New Enterprise.

lIshed
Prospect for New Enterprise.
a particularly gratifying feature of
the Wall street securities market last
week was ;ra pronounced strength OF
the bond department on the Stock Ex-
change Activity was the greatest IN
six years. and the excellence OF the in
vestment inquiry was shown by the fact
that stockholders absorbed all but a few
millions dollars OF the New York Cen
trails si00.O00.000 debenture bond
issue. An offering OF si0.o0O.o00 of AZ
per cent. notes by the Baltimore and
Ohio was subscribed in about two
hours.
Investment dealers reported that
there was a good over the counter"
demand which could not be met be-
cause the market had been pretty well
cleaned up, and altogether condit. ons
seemed to be IN shape for operations N
new financing and refnanc!ng of cor
porate requirements Indispensable TO
any realization OF the prosperous op-
portun.ty with which the coun'ry IS
confronted To considerable eNten,
speculative activity in stocks has pre-
vented the growth of an even more
active inquiry In the investment mar
ket. but the conditions for good busl-
ness in new investment securities have
been youchsafed and the optimism
which stock market speculation has adj
vertised cannot be detrimental To prof.
ectS FOR underwriting corporate pro-
motions.
Furthermore there are indications
enough that the managers Of financial
and corporate cndeRvur are more in
Clined than they have been for several
years to enter into arrangements TO Ia
cilitate the inauguration and prosecution
of new enterprise. Corporation directors
and bankers are doing things oc forward
b.aring which would rot be appropriate
to a period of protracted depression.
Minor evidence Of this has been con-
tanned in the scheme for readjusting the
capital affairs OF the Interborough- Met
ropolitan Company AMI in the declarH-
ton by the Consolidated Gas directors
of an extra dividend, with an intimation
that the stock has been raised from "A s
per cent. dividend basis TO At least per
cent and perhaps per cent,
~ more significance Is the formation
and announcement of plans for the re-
habllitation of crippled railroads. The
first large undertaking of the sort is the
reorganization of the Wabash Railroad.
which has now been formally started.
If this reorganization is as Favorable re-
of the reorganizers meets with early
success helpful impetus will he given
to a large number of projects which will
assist in raising industry and trade from
depression and placing II on a plane OF
prosperous activity. The Wabash plan
deserves success. for there has been no
temporIzing with difficulty, 4 drastic
and thoroughgong rearrangemcnt OF the
propertys financial structure Is contem-
plated and the plan points the way TO be
followed by other reorganzers
Total capitalization has been cut from
almost per cent. but IL is of most con-
sequence that a reduction of about A.
per cent. has been effected in funded
debt and in fixed charges alike. Pre-
fcrred stock to be issued partly In en-
change for bonds that have been scaled
down and partly in return for heavy
assessment to be paid by the holders Of
the outstanding shares has been substi-
uted for bonds. and If the plan is sue
cessfully completed the Wabash will he
started in a career OF greater usefulness
To the public and more profit To its own
ers than IL has ever been In the past
II should he noted though that in
dealing with the difficulties of the rail
road problem corporate finance asks
something of public policy Even SOL
vent railroads are not going to be long
able 10 remain out OF the hands of re-
CeiverS II they are not going to be per-
mitted to earn enough money to make
railroad ownership more attractive than
Il has been In comparison with the
status of the creditor OF the railroads
There IL no question that more railroad
financing should he done with stock and
less with fixed charge securities. but this
cannot be accomplished unless the hope
OF dividends is better secured by earn
ings under the new regime of Govern
ment regulation.
"War order stocks have been the fea =
ture OF the Wall Street share list lately
The general market has been huctuat-
ing around the level of advance reached
two weeks ago The general check has
provoked two sided trading and profess
sional spectators have been looking for
symptoms OF something more than a re-
dictionary setback from the extreme OF
the spring rise. They have been all the
more prompted TO this view by tho ex-
element OF the dealings in the war or
der stocks, hut the gambling features
presented are familiar symptomatic
phenomena OF stock market perIod In
which speculation is anticipating the es-
tahlshm"ut OF general business ac-
, tivity in a state Of expansion.
Criticism of the more excited fea-
lures of the stock market has even gone
far enough to express itself in outright
sceptioism OF tho war business OF
which MANY Aeaeriptionu ~ .aouritSa.