The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-07-13
THE VALUE OF SHARES.
what They Are Quoted mt on Change
May BE No Indication.

The Iron Age.
OF the 100000 railway and miscellaneous
sold 3D. on the New shares of the
par value of $19l, 3735OO. represented other
than steam railway corporations. The trad.
ing in a single industrial reached 3lI,0U
shares during the week, being marked by
a wide range in prices. 1t is In these Sc
curities that much of the purely specula-
tive trading is DONE since their merit as
divident earners is yet TO be tested They
are bought either with the idea that by
shrewd manipulation they can be unioaded
at an advance, or else on account OF the
encouragement held out of a high rate or
dividends. The securities of some OF the
important railways have ceased 10 inquire
in the speculative list, because they are
practically certain to declare dividends at
a fixed rate.
The speculative stocks will cease to De
such only when their dividend earning ca, ca
pacity has become thoroughly fixed: The
measure by which the new industrial COM
the price Of their securities in the public
market. 'lhe sale Of commodities at
price which yields profit, but which Is
fers chance for a long life for any corpor-
alton. with results satisfactory to the snare
holders, regardless Of what the pubic or
professional spectators may pay for It's
shares. On the other hand. corporation,
however great. which can be undersold by
even a small competitor. stands In danger
Gus position, which Is not improved by any
possible quotations for the shares sent over
the ticker" Fears have been expressed
lest financial panic should 1 result from an
curities. While this would be possible, there
seems to be no reason for being disturbed
about the matter now. Already the leading
financial houses are more cautious about
joining underwriting syndicates than when
the consolidation of industrial interests on
Of any change ~ of views With regard to the
principle Of consolidation, but because of
the possibility of OVERRIDING the thing. And
yet the financial assistance needed In the
consolidation Of a really good industry, on
safe basis, doubtless could be secured as
easily to-day as at any. time in the past.
poration of which is reported from time to
time. never take actual shape. Or, such
company may begin business without the
issue of shares to the full extent authorized
In its charter. Again, 1T is usual, in bring
ing about combination, to distribute the
Naroue er Int seseT With
certain amount to the promoters. In such
cases there is really no change of owner
amount to millions of dollars, but listing
them on the Stock Exchange does not imply
that the public is expected to invest to any
hands off altogether. Taking as an exam
pie recent week. no sales were made on
the New York Stock Exchange OF the
ways, with an aggregate capital OF $So,OOO,-
COO. This may have been because none was
the listing of shares and their purchase by
the public have no necessary connection.
Nor does the public always respond when
invited TO subscribe to the capital stock OF
a new corporation. The weakness in the
position of Mr.. Hooley, the English promo
ter who recently came to grief, was that
neither his alluring prospectuses nor the in
fiuence of his high-priced titled directors
would induce the public to buy the shares
of the various companies which he assisted
in getting up. Mr.. Hooley passed for a
wealthy man because his name appeared in
connection with so many schemes capital
lied for millions, but when the bubble burst
hrn amir
public really had not invested largely. In
this country. as in England. exaggerated
ideas are afoat as to the amounts invested
in many corporations having large CAPT.
| talon paper.
The fact is that a good industry capably
managed. with the help of ample capital,
| Is in no danger Of being wrecked nowadays
by any ordinary happening in the financial
world It's real assets are the same. whether
Wall street quotes its shares at 21k or $50,
| and its actual liabilities are no more nor
| less on account of such quotations. 1t is
not meant, however, that there can be no
| danger growing out of giving inflated val
| ues to Industrial properties.