New-York tribune., 1901-03-03
financial.
The Financial World.

various companies II Is proposed To merge IN
the U. S. Steel Corporation was mailed from,
Mr.. Morgans office yesterday. Informatio,
from good sources Is that the plans for the
formation of the new company are so far as
varced that It may be said there is no onno-
stiop OF moment TO their completion There
has been growing among Steel & Wire and
National Tube stockholders, because thew did
not get better treatment: but the dissatisaa4
ones will doubtless turn in their stocks Ike
little men. and take 1t out in swearing This -
the usual course.
The considerable drop which took place IN
the prices of the various steel stocks on thu
semi-Oficial announcement of the terms n.
merger. came mainly from the forced selling
OF an important speculative contingent Of
which Mr.. Gates is the reputed leader. Know
ing that plans for the purchase Of the Car
negie works, and for the union of the other
companies. were being forrnuIated-in fact hav
ing a share in their formation-they loaded m
with stocks TO the breaking point. When the
thing came out suddenly, they could take no
more. and IL did not require much outside sell
ing to tip over their loads. There are all sorts
OF reports about the losses. but Judging from,
the lamentations which echo from the WALDORF
Astoria corridors they must have been heavv
II is supposahIe that these gentlemen knew
the plans generally, but that important Ht,ls
table which gave the figures Of merger. WAS
an item which Mr. Morgan omitted 10 inform
them Of They only got it when it was every-
bodys news This. however. is supposition
Calculations to what the new con1uanv
will earn. based on reports Of existing com,
panies. figure out the per cent on the pre-
ferred stock, and from : to s on the comuon
1t the company has good management it ought
to do this 1t is obvious that concern so big
and so far-reaching in it's own line OF business
has great possibilities in working economically
in control Of it's raw material and in its COM
mand OF the market for it's products The com
pany's largest customers will be the railroads
and railroad men are the controlling power in
the corporation In that respect the combina
tion is a close one. II is calculated that the
purely railroad business of the concern will
pay the interest on the bonds and the dividend
on the preferred stock Mr.. Keene expressed
himself with some emphasis about this stock
yesterday declaring his belief that it would
prove as good per cent stock as there is IN
the market
The market prices of the new stock will he
strongly influenced for a time by the public
timidity about the colossal proportions of the
new organization. II is not only the largest
thing OF the kind in this country but probably
in the world. We have seen that it has en-
gagged attention in Europe almost to the same
extent as here; and the foreign newspaper Of
fees have given out columns OF editorials on
the affair. betraying the public fright at the
magnitude Of the thing and also great igno-
rance of IT, There were some sensible inter
views with Scotch and English fronmasters
who being in the business. knew what they were
talking about. The public generally. however
VIII have TO get accustomed to the giant before
they cease to be afraid Of him: and until they
do get over their nervousness. the market for
the stocks will probably require skiIfuI nursing
On this subject. public attention may be e.
rected to the fact that a big steel company uiay
be very good and small one very bad Wit
ness the Tennessee Coal & Iron Company. Last
May the directors lifted the stock from
chronic non-dividend payer tc the dividend list
at the rate of per cent Three instruments Of
this : per cent were paid. and the fourth Ge-
faulted Now comes out what claims % be
the synopsis of an expert report (the eorreetRsss
Of which has not so far been qUestiouedO from
the company's official head. stating that the
furnaces and machinery are aItiquated. the
steel business run at profit actual loss.
floating debt -xists. and from three u five
millions Of dollars must be raisel 10 puJ the
company in proper shape If this report be
true or the published synopsis Of it be true. it
is time for President Woodward. OF the Han
over National Bank. TO make public explana-
credit of his own bank. On the strength of she
| dividend T c. L stock more than doubled
in price going in wild rushes up to 125 or more
Then it began to fall back in the same way. t
is selling now about 30. While the stock vas
going up all Wall Street was talking about the
Hanover National Bank people backing It. and
particularly President Woodward. Does MI
/ Woodward think that such business as this can
go all over the United States. and not hurt the
financial institution of which he is the head
1t is Incumbent on him 10 say 10 the pubic
whether that Bacon report is true. or not true
This is sufficiently unpleasant topic ana
may be left for the more agreeable contennpld-
tion of the reports of railroad earnings, which
continue to come in al figures which are aston
ishingly large Their magnitude indicates now
active the general business of the country must
be- TIE Atchison's report for January was
record breaker; and 1t may be noted that the
! immense increase was made in the face OF eoai
strike in Colorado and Wyoming. which SO COM
| pIeteIv tied up production that the company
was forced TO haul IT'S coal from ILLINOIS, t"e
Union Pacific's January report figures out eafh-
ings at the rate of 10 per cent on its stocK- 1H7
Southern Pacific reports a S560000 net increase
for the month, and the gross IS running d 'A'
rate of 20 millions for the year. In the at
the Pennsylvania statement for the same noH''.
shows little trlfie Ike a InNLioH l'i~-~'-1~
all these increases come on the top Of Big earn
/ ings the year before. While this sort OF tnlaS
continues in the railroad world there is not
rnrcb material for bearing the railroad stocAS.
One of the strong stocks in this list mas nseh
Southern Railroad. the preferred having touefl-d
20 and the common p 1t is with some grat'u-
cation one notes that since the first notice or lhs
road appeared in this column. made after 'r'p
over It in January two years ago. when the Work