The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-11-01
FINANCIAL AND COMMERCIAL.
TUESDAY. Dot. 81.

1UhbDAIs wv oi'
The Leaders on the long side Of the market
are certainly entitled to good deal OF credit
for The mastery tactics that they pursued
They succeeded In very nearly offssttinR the
disturbing effects OF heavy sales OF stocks by
London and close m oney market By taking
I'D and pushing 10 the front section OF the
market that has been neglected and heavy Tor
some time past, namely the steel ana Iron
stocks For various ressons comparatively
large short interest had been slowly making In
these stocka. particularly in the common issues
and to-day a part OF IL at least was frightened
into covering. Federal Steel common was adj
ysnced ~ points. the preferred points. Steel
and Wire common az per cent and the less
active Issues moved MP In sympathy.
There was no news regarding this interest
ipG group Of securities. IL 10 to be noted. now
ever that as better understanding obtains as
70 the status and prospects OF the newer secur-
files based upon the iron and steel Industry.
the alamor that attended their launching be-
gins to die away.
without doubt the unofflsa reports OF enor-
NOUS earnings by the steel and iron companies
are based upon facts. They are confirmed to
an sxtsnt BY the unusual activity In the Iron
and allied trades and by the phen omenal adj
vance In prices. Butthere are other considera-
tons that should be taken into account In de-
tsrmining the present and prospective value
Of the scores OF millions OF securities. pnrticu-
larry common stocks. that have been issued In
conn cotton with the floating OF these gigantic
combinations.
Perhaps the most important is the attitude
Of the managers OF these corporations toward
the Junior securities that they have created.
Those m anagers as a rule are producers and
man ufaoturers who have sold their plants TO
the several companies OF which they are now
the Officers. A q rule they took preferred
stock for tho value OF their plants. or that stock
was sold to obtain cash TO pay them. while the
common stock represents good will and pros
p.ctive earnings. resulting chiefly from
economies and reduced competition. No
one knows better than those managers
that the present activity In the iron trade and
high prices for both raw material and finished
products cannot last forever. A reaction Is In
evitable.
The shrswdest Of these managers are there
fore preparing for that event BY putting their
works in the highest degree OF efficiency so
that thsy may be able to earn their hIod
charges and something upon their preferred
stocks when the demand for their products
slackens and composition again becomes =
factor In the business 1t follows that slarge part
of the present extraordinary net earnings. OF
which the public 10 advised from time to time
in an unofncial way. will be used 10 minimize
tho cost OF production when business is less
prosperous than It is now. For the common
stock older the management has little regard.
He has bought what the vendors and promo
tiers have been willing TO sell. and while In
some oases he may get dividend or two. the
great bulk OF the surplus earnings OF to-day.
not required TO pay dividends upon the pre-
ferred stock. will he used to strengthen the
position OF that stock when . less satisfactory
order OF things prevails.
Another factor that should not be overlooked
10 the great increase In output that has been
slim ulated By an almost Unsuitable demand 'or
iron. When the reaction comes the new mines
that have been opened and the old and new
furnaces and mills that have heen started up
during the past year will want their shars tho
diminishing volume OF business. The result
must be obvious enough. Moreover. in forecast
ing the failure earnings OF the iron and steel
ind ustry It should not be overlooked that
considerable percentage Of the profits claimed
TO have been made by manufacturing concerns
during the last year 10 the increase in the value
Of raw material. either on hand or fortunately
contracted for before prices attained their
present level. This source of income is not
liksly to he drawn upon to any great extent
hereafter. In fa,t. many OF the large
companies that do not control their own
supplies OF pig iron or OF steel bill
let's win soon be working upon raw
material costing them prices that will make
their man ufaoturers' profit no more than nor
NAL These various considerations and
changes may not become effective to- m orrow
now nor the next day. but 1t Is patent that
unless precedent Is yalueless they will become
operative in due time
The activity in money was due In part to the
shifting OF loans incidental TO the interest
payment maturing tomorrow and also
TO the difficulty OF securing accomm oda-
lions or indifferent collateral. chiefly in
dustrinl shares The corporate and SINH
lar interest payments Ia November are
computed BY The Daily Stakeholder at slS. 537.-
l81 against 500 451 .a94 last year. and ST.
144. 1e1 four years ago Dividend payments
foot up sl4.0SO.57S against 100 last
year. and $7.197 100 four years ago. The total
is s32e17.757 against O.235.7 ia last year.
and S24. 1923 921 four years ago Other distri-
buttons Of which no record Ia kept will prob
ably bring tho total up to f40OO0,0OO.
London. owing to the unfavorable war news
from South Africa. sold fully $4,000 shares OF
various stocks. or more than foreign nrbtrage
houses bought yesterday Its sales were
remarkably we'll taken considering tho
condition OF the money market and
tho consequent small volume OF out
side buying. The railway list showed a
good deal OF irregularity and was In the main
lowor than yesterday at tho close. The selline
was most effective In the Changers. IN Northern
Pacific Union Pacific. Louisville and Nash
ville and Atchison preferred. Strength was
shown by Missouri Pacific. Southern Pacific
Southern Railway preferred and Wisconsin
Central Issues The demand for the last was
influenced by the fact that the company Is now
earning at the rate OF the full dividend upon
its preferred stock. and about per cent pei
annum upon the common.
New York Stock EIohangs-Snics Oct. 81
UNITED sTArEs AND STATE BONDS I'm ST COOS
o I y ns c.-' US
CLOSING PRICES OF UNITED STATES BONDS.
BID asked. BlL AIked
US2r.r, US4sr