The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-06-26

Union Bag and Paper preferred. 81 rs 10
This table. II will be observed. comprises
only stocks which are bought and sold on tho
stock Exchange. emitting some as unimportant
and others for want OF full reports 1t is.
nevertheless, sufficiently complete to show
how great the fall has been. and how nearly all
the stocks OF the class it embraces have been
affected by it. 1t would DO moro striking, II 1t
presented tho total amount In money OF the
depreciation in value. produced by tho fall.
but an accurate computation of this amount
would require considerable labor, and the re-
suit would not be moro instructive The i'm
portant fact lie. that the stocks OF twenty-one
leading industrial companies. with capitals Of
all the way from $l0.O00.000 to S100.00O.0 900
and upward. are worth less now in public es-
timation. by from one-tcnth to half. than
they were few weeks or months ago.
The immediate cause Of the depreciation Is. OF
course. an excess Of demand over supply. Tho
stocks have been made and put on sao faster
and In larger quantities than a market could
be found for them. and they have declined in
value accordingly. This, however. is only an
other way OF saying that they have not proved
sufficiently attractive to induce buyers to pay
the prices asked for them. There Is. notori-
ously. enough money seeking Investment to
absorb even the Immense amount OF industri-
ais offered. and leave room for more. II they
cOHLutnueu eS W JuuRUltHt VI ltl-
vestors as safe as well as remunerative. With
Governments selling on n basis OF less than 3
per cent. first mortgage railroad bonds on one
OF per cent. and first class railroad stocks on
one OF less than per cent. the only reason
why industrlnls promising. and for the pres
ent paying, 9. and & per cent. are not eagerly
snapped UP, is that capitalists distrust them.
For example. on the American Mailing Com
pany preferred stock. ! per cent. per annum is
paid on Federal Steel preferred. Is per cent, on
Glucose Sugar preferred. 7 pcr cent. 4: on Inter-
national Paper preferred. tho same; on Ma
tional Biscuit preferred. the same on National
Steel preferred. the same. and on United States
Rubber. per cent. At the ruling prices for
these stocks and many others OF the same
class the least return they make to the
purchaser is u per cent per annunl. and some
OF them yield 10 per cent Nevertheless they
can he bought on these terms in unlimited
quantities. whereas for the guaranteed stocks
Of railroad companies like the New York Gen.
tral and the Pennsylvania. standing bids at
prices which mako their return less than per
cent. fail to bring out sellers.
The prevailing low prices OF the industrial
stocks are. therefore. nothing moro than an
index OF the lack OF public confidence in the
psrmanence OF their dividends. In estimating
the value Of any Investment the certainty OF
the income II promises Is quite Us important q
fact rs Its amount. ana prudent investors. as
We see. prefer 3 and per cent. we'll secured
too. 7nnd 10per cent. which may. possibly, drop
to nothing. That higher prices were paid for
the industriais few months ago than are paid
now. indicates. also that the distrust Of them
has increased, and that less confidence Is felt
In them now than was felt then. Only with an
increase OF that confidence will there come an
Increase In prices. and II there should be de-
crease Of 1t. a decrease Of prices will follow.
1t can truthfully be said. that to those who
know all the facts, tho prospects OF many OF
: the industrlals seem quite as good as those OF
other stocks which are selling for twice as
much money in proportion to the income they
yield. The trouble Is. that those who are thus
we'll informed are few. while the ignorant aro
many. 1t Is true. also. that the mass OF invest
orS know. really. as littlo about the hlRh-priced
Investments they buy rs they do about the
low-prced industrals they reject With the
affairs OF the New York Central Railroad Com
pany or Of tho Pennsylvania Railroad Company
they are as unfamiliar as they are with those
OF tho Federal Steel Company. the American
. Tobacco Company. or any OF the other compa-
MES mentioned In the table above printed. In
the one case. however. they have before them
q successful career OF many years. during
which dividends on stock and interest on bonds
; have been constantly paid whereas In the
= other. they have only promises and eXpecta.
uops on which to form an opinion. The bust.
2ieSs OF q railroad. like that OF a bank, settles
down. after while, to Lowell. the average OIL
which can be computed. whereas a newly
launched enterprise has Its record to make
In tho absence OF this long-contlnued eX-
perience 1t is not surprising that the capitalist
who is asked to part with hard cash for a frac.
tional interest In 4 concern with an enormous
capital. for the payment OF dividends on which
correspondinRly enormous net earnings re ne
cessAry. not for one. two. three years. but fol
many years to come. should hesitate. and be
0ntioed into doing 1t only by the expectation Of
extraordinarily large returns. He may have
good reason to accept as true the representa-
tions that the earnings Of last year and this
year Justify the payment OF the g. Z. and 3 pei
cent. promised on capitals OF S1OOO0.O0O
$4,000. 900. and 10O.C00.000. but nobody car
assure him that next year they will amount &c
rs much. and what will happen year after next
and tho year after that. is an inscrutable mys'
terry to the wisest.
Moreover. In conducting the business OF an In,
dustiIal corporAtion the De rsonal qualifications