The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1899-06-02
DISQUALIFICATION

III
FINANCING Banks Growing More
cautious in Underwriting These
concerns.
New York Journal OF Commerce., It
.,s been suggested In this paper that
N, oycrcapitallzatlon OF industrial
ordinations was not only one OF the
ros, dangerous features Of the present
sor,ral.zing tendency, but that 1t was
,be leading motive for Its application.
:, has been quite, apparent that manu-
t,cturers who were not tempted to en-.
Tar n combination by the stock argu-
vents Of lower prices for raw material,
avid higher prices for products, and less
.ynense In selling. we're tempted by the
,,rr. bonus OF common stock offered.
rtc experience OF n dlstIller who was
oGc-ed the cash value OF his plant and
an eoual amount OF preferred stock
NAV be exceptional, but It, Is not at all
uncommon for manufacturer who en-
,ers a combination TO receive In pre-
tertcd stock the value OF, his business
md m equal amount OF common stock,
the ya,ue of which, whatever It may be
IN the market, Is n bonus
That this bonus was potent factor In
,be formation OF combinations is now
moved by the fact that the difficulty in
Getting combinations financed is per-
+en,lbiy checking the completion OF the
combinations II ten men simply de-
sire to combine, their concerns in the
interest Of those obvious economies of
n single management upon which pro-
moters wax eloquent little financing
IA necessary. They have only to incor-
porate themselves and take their pro
rata shares OF tho stock Of the new COM
many and the thing Is done. But II In
addition TO SIC, 000. 900 OF stock for SlO,-
ep.ooO worth of business they desire to
Get 5000 600 bonus from the public the
transaction IS more complicated. 1t IA
now becoming difficult, and that is de-
LAYING the completion Of several OF these
corporatlons.
Bankers are very properly growing
slow about underwriting these concens,
end they explain that the public Is slow
sbout ,buvinc the securities. The first
,s,son given for rhis 10 that tho han.
tars and the n,,b,ic ara ,nnrehepsIve re.
r,rd,nr the future. of the combinations
and this Is unouestIonobly true If,,he
,-orsrred stoct reoresorts!an the cant,
"a, that is really ,nyes,ed IN tho bus,.
rss, what c,n ha tho y,ifrra of tho
,omno, stool whom 80. .cond,,,on of
,rs,n.e, 5oos No, ban,,n 10 ba hoor-
,,r. !, fort when !, 10 b,d9
pu, .,,s claimant ~ ,nnrehars,o, 10 NOT
,sa o,,,, ohst,,,.. ,h. ,,otar, ~ o,,,,
,r,,,ors ,re .,co,,tar,rr W. n,h
ush 10 .,,. H.. =, ,.,,,r,r,,, ao,,h,u
''-' ''' i''u '' .o'''"-
ATOMS formed. or IN progress OF lorna
tin, during May. and their aggregate
Capitalization Ia about a thousand mil
u.ns No.. H.,
No''' Surpose ."s eo'i''''''i''s KS III
vested millions In these enterprises?
Where are the additional millions COM
Irr rrn,po Two Iuvae,Inr DubiIc ,,p
ne nA' e''.
OBTAIN the money only py uispoSihS OF
other Investments or from idle funds
that ,ccumulate5 during n neriod wben
moi, 80, ts.,o, ~. 49,.
"t''s '''''s "ns '"'es'eu bu' .'e
sale or existing investments also In
wolves buyers and the use Of capital,
and tho amou,t oe rrInvee,,1 con,,,l
-,
el'""'u'a'cu dur'hs years ot Dad ousi-
ness must be Of limited amount. These
combinations during May follow the
conhir,,,o,s .h,, ~, ,or,,o,, CO -,.
Vs., ,''''" 800 t L., were to''''e'. 81 'af-
'u''' ana pu, sucn immense volumes Oh
securities upon the market during the
first four months Of the y.ar II Is
m, s,,o,,,,,,,o, ~ -. ~. 80
aus ''''s' u'''' '''i' 'ie pa"Neis '""e nave
Undertaken TO float these Issues are
complaining that the public IS buying
slowly. The public has already spcn,
a good part o. its unemployed capital.
II is still able to speculate In these
securities, where 1t Is required to nut
up only q margin. and some OF these
securities were Issued rather 10 be sold
than to be held for the return on them.
But some one has 10 carry them. and
the speculative public expects the banks
10. while the banks are finding them
selves loaded M. and nj the same time