The Worcester spy. [volume] (Worcester, Mass.) 1898-1904, 1899-06-24
DIVIDEND PASSED,
American Steel and
Wire Common Must
Wait Awhile.
LEGAL POWER QUESTIONED.
Over $l,OOO,OOO To Be
Expended on Worces-
ter Plants.
LEGAL POWER QUESTIONED.

ICI L IdllUCs
New York, June 23.-The American
Steel and Wire Company has declared
a quarterly dividend of IL per cent on
its preferred stock
No dividend will be paid on the COM
mon for the present.
After the directors meeting a state
ment was given out to the effect that
the dividend on the common stock was
passed owing to the difference of opin
ion entertained as to the legal power of
the company to pay any dividend on
the common stocks to the present time
and on account of the pending litiga-
ton in New Jersey concerning the Fed
eral Steel Company.
While no statement on that point was
Forthcoming, it is known that the min
GRITTY in the board who favored divi-
dend on the common stock spoke their
minds rather freely, but to no purpose
The western directors, to quote one of
the minority, had the thing all their
own way"
Henry Sehgman, one of the minority
directors and member of the banking
house of j. & w, Seligman & Co. which
financed the American Steel and Wire
Company, refused to discuss the mat
ter. He intimated. however, that at
the meeting he had not receded from
his stand that a dividend should be
| declared on the common stock.
| In the market there was a rally in
| the common shares almost immediate
| ly after the official announcement be-
came public.
One of the claims made by Chairman
! Gates while in Worcester this week as
a reason for opposing the declaration of
| dividend on common was that in i'm
provements already made and in plans
contemplated it will be necessary to
| expend over $1,OOO,0OO in Worcester the
| present year. He deemed this a greater
| necessity, he stated, than in declaring
dividend to buy up the stock.
| 1t is expected that a statement will
| be issued today showing about six per
cent earned on the common stock for
| the quarter above the preferred divi-
dend for the year, which presumably
will comfort stockholders for not get
| ting a dividend as we'll as the street
which was prepared to make a bull ar
gument out of a dividend declaration
and to take a little turn on the long
| side
The insiders who have been pointing
| TO the injunction on the Federal Steel
| dividends as the reason why the. direc-
tors should refrain from paying on the
common stock are, of course, pleased
over the situation.
| AS The Spy pointed out on Thursday
| the real reason, of course, was the fact
| "a hoJ or To n
| considerable extent and were in a mar
ket position where dividends were moi
their first choice
| The semi-official statement that the
company earned SO, $780, 900 in the first
four months of tl.is year and has beer
earning in the neighbOrhood of 81 900 0O(
a month since attracted attention anc
was accepted, but it was considerably
puzzling why insiders should have sod
| so quickly on such a condition of az
| fairs. The reason may be that insiders
knew the present prosI Gritty to be ex-
ceptional and not certain to last in Its
extreme form. The company is getting
| the benefit of high prices and a low
cost for labor with an extraordinary
| demand Those who admit that they
have sold their stock say, however. that
| the company is on a basis where taking
| one year with another it ought to give
a fair return on the securities at pres.
| ent prices.
The iron and steel market continues
| to bear convincing testimony to the
strength of the prevailing business con
| ditions. AS vet there is no sign of any
halt in the upward tendency of. prices
! and demand from all departments OF
the trade continues unabated.
From all iron and steel centres come
reports Of short supplies. One writer
| characterizes the advance in prices as
| due to "a sheer force of demand that
appears to grow even faster than the
arguments designed to show that Al
| should begin to curtail"
At the moment the anxiety of TIE
trade is further intensified by the
| large number of furnaces which must
soon be stopped for repairs
From a statistical standpoint the sit
uation is remarkably strong Both pro
| duction and consumption have nov
reached the highest figures on record
| and yet the stocks of metal on hano
are relatively smaller than at any pre-
! vious time in the history of the indus
try.
One of the largest interests gives il
as his opinion that period of com
! parative dulness will probably cover
| the next two or three months. During
! the last quarter of the year, however
he expects to see higher prices thar
| have yet been recorded.
A report which is causing some un-
| easiness comes from Cleveland. IL Is
! to the effect that spectators are get
| ting possession of considerable iron
| They are said to be paying a higher
rate than is offered in the open market
! and it is feared that later on they vii
! be in a position to demand excessive
prices for their holdings.
| The general condition is one that re-
| fleets the blame of its existence DacH
on to the period Of hopelessness, II
which production was limited to tmlne'
! diate needs. With the present lhuCS
! trial revival there has grown up de-
| mand much too large to be supple
by immediate production, and the ran
/ IRE of producers during the two OF
| three preceding years to keep up tht
| usual large reserve stocks is now likely
| TO result in almost an iron and stte
| famine.
The Iron Age says: 1.-THE temptation
| of large and. immediate profits IN the
operation of almost any plant is star L
| ing nearly every old blast furnace ano
rolling mill which never hoped 10 p'
! productive again. Individually THESE
| are not important, yet in the aggregate
| they are likely to result seriously par
| ticularly when it is considered that i'm
! nortant additions are being made II
| modern plants. 1t is true that thell
| nrospective product, for the near IT.
! ture is being absorbed but they intro
J duce an element of weakness when tEC
| industry must count with.
"How soon this pressure will deVel-
on depends largely upon general pusi
| ness conditions. 1t is a fact that Iol
| the next few months no marked e1ecl
] u.rrabaudpd and that IL LOOKS