The Worcester spy. [volume] (Worcester, Mass.) 1898-1904, 1899-06-22
Big STEEL SLUMP.
Bankers Say There
Is No Real Rea-
son for 1t.
INSIDERS BEARING STOCK.
President Lambert and
Western Directors
Here.

The threatened failure to declare a
dividend on the common stock of the
American Steel and Wire, is causing
no end of gossip in the stock market.
Some of the local investors are d
trihe worried over the drop Of yester-
day afternoon to 54 But the bankers
and brokers here who have handled the
stock from the beginning are not both
cred in the least.
They know, as does everybody else
who has made a careful Investigation
of the companys affairs and watched
the reports closely, that the earnings
since January 1st will fully justify the
declaration of per cent dividend on
the common stock at this time.
In fact, that was the general as
sumption in the market up to two
weeks ago when the attack was he .
gun upon it, 1t was reported then that
a certain banking house in New York
was selling 10000 shares of common
which it had received at the organiza-
ton. A similar report was circulated
of a Boston house.
The scheme was too apparent to be
worthy of the name. The determl1a-
ton of the insiders was so intense that
they seemed to forget even ordinary
cleverness in their efforts to bear the
securities. But one logical reason pre-
scented itself; it was being done tof
their own purposes.
1t was stated that several of the di-
rectors and John w. Gates in partlc-
ular, were short of their own stock
and would be willing to cover at prices
much below the prevailing figure.
The same situation existed in Federal
Steels and in American. The two bear
parties made an alliance. The attacks
on both stocks were almost stmultan-
eous and were, in both cases, directed at
the dividends on the common stock.
At the time the banking houses were
reported as unloading, the statement
was taken seriously and the bankers
finally issued a denial, also stating that
the members of the firm were strongly
in favor of a dividend on the common
stock. Then Immediately began a con-
troversy between the New York and
Chicago directors over a dividend,
which continues. The latter oppose the
dividend while the former have COM
mitted themselves to the other position
and will be seriously compromised If the
dividend Is not declared.
1t is reported that the directors VINO
are short of the stock live in the west.
They are led by Chairman John w.
Gates and President John Lambert,
representing the manufacturing inter-
ests. They argue that the dividend
should not be declared, on the ground
that various plants need Improvements
and that dividends should be- paid on
the preferred stock a year before the
first dividend on the common. The east
ern interests are led by Seligman and
represent the banking interest of the
company, desiring to declare diVi-
dend upon the belief that the profits
fully justify it.
A quarterly dividend OF one and
three-fourths per cent was declared on
the preferred stock, April Is, and an
other is expected July Is. The preferred
stock closed yesterday at 80 Y, very
considerable tumble as compared with
the quotations of a month ago. 1t
would of course be unfair to say that
this Was due to a lack of public conf
dence in the stock when one takes into
consideration its very great earning
capacity. But certain it is that the
wrangle over the common stock has had
its effect in a general way.
No dividend has been paid on the
common stock, and it remains to be seen
whether one will be declared at the
meeting tomorrow. The common drop
ped Tuesday to 50 at one time during
LAlC beAEF anu b4iC Aileo-AH9S Ip4It SetNhi'-Nt
was 54B. Yesterday the stock opened
at 545s, but very quickly tumbled half
point.
AS showing how the action of the Ill
rectors of the American Steel & Wire
is received in financial circles, the New
York correspondents of Winslow & Co.,
of this city say in a recent letter:
The action of the management Of
the Steel & Wire company's affairs, We
think, has done more to unsettle the
feelings of investors in industrials than
anything that could have taken place
1cnr+in.,aa a., pa ~