The times. [volume] (Washington [D.C.]) 1897-1901, 1901-01-17

amount Of long stock Sentiment swung
completely around from extreme optimism
in the morning to hopelessness in the af-
ternoCn. The statement in the New York
Suns Monday financial article that the
end of the boom was reached a week aso
and the suggestion that much lower prices
are now TO be recorded, was recalled WV
idly, and added TO the depression that pre-
vailed.
News developments of the week have
been OF a character directly at variance
with the market movement There have
not been three other consecutive days
during the upward movement when so
many encouraging matters have come to
| light, SO many developments that prom
ised prosperity for business and for stock
holders. The Burlington melon" is one
of these matters. The declaration of an s
per cent annual dividend on Tin Plate
common stock, the declaration of a lump
cash dividend OF per cent by the Fed
eral Steel people. the election of repre-
sentatives of practically all the anthracite
coal roads into the directory of the Lehigh
Valley the decision of the Senate to cat
the tax on tobacco are other occurrences
of great moment, when taken as indica-
lions of business conditions. They certain
ly do not offer any legitimate reason for
lower prices for securities in any part of
Il
therefore. must be ascribed entirely to
technical conditions. The question as TO
how far il will extend is still as far from
solution as it was week ago. 1t is need
less to say that a large percentage of the
conservative element do not take the black
view of the professional market traders
above alluded to. AS has been said before
in this column the decline has been due.
Conservative people were prepared for 1t,
and have not been hurt much. If any. They
sold out near the top, many of them. These
same people are beginning to buy stocks
back now. on scale down. Before sum
mer the level is likely to be higher than
il has been at any time yet in large part
of the list.
Federal Steel common was the weakest
feature of the list. and one of the most
active and interesting as we'll. The break
here is one of the inexplicable matters of
the market. Apparently there is as little
reason why this stock should decline on
the news developments as there is that
the entire market should break because
the Burlington stockholders are to re-
ceive $3.50 in rights as bonus for every
share of stock they own. 1t opened at
so IL full point of from the lo- clos
ing of Tuesday and during the day sold
down to AZ. The close was at IS as. This
stock was selling at 81 on Tuesday. This
price was 10 points higher than the low
yesterday, but at the same time it was
considered by many market people very
low price The steel securities have fail
ed to participate in the boom of the past
six months to any important extent. The
reason for this. whatever il may be, is
probably the reason also why Federal
Steel was weak yesterday. On the whole
public distrust and unwillingness to pur-
chase mot founded on any legitimate rea-
son-may perhaps be considered to be
chiefly accountable. The investment hold
ers of these securities may have to
wait long time apparently before they
come into the reward for their latience
and faith. The outlook for them in the
end is extremely rosy. At their present
level many people, not of the public, are
likely to buy.
The facts regarding the Federal Steel
company and its securities, as far as they
are known, are that IL is controlled by
some of the most important capitalists in
the country and managed by some OF the
most experienced and expert steel men;
that from the very first 1t has made an ex-
cellent showing of earnings, well above
the present dividend requirements, that
its present outlook for business is fine,
both as to quantity and prices; that it
has paid a 1 per cent dividend regularly
from the start on the preferred stock
and is now paying regularly per cent
dividend on the common stock, and finally
that the prices of both the common and
preferred securities are at level where
the dividends net more than 10 per cent
on investments made. The lump sum cash
dividend of per cent on the common stock
was declared on Monday night and will
be paid in few days. 1t is probable that
change in the charter of the company
to allow of the payment of this dividend
quarterly hereafter may be adopted at
no very distant date.
There was a story yesterday that the
company is looking for money" want
ing to borrow $40 900, 600. The truth of
the rumor could not be ascertained, but
one statement made regarding 1t was that
this sum is to be expended in increasing
the plants of the concern and that deben-
ture bonds will be issued. Whatever the
facts may be, If there are any, 1t may be
pointed out, that there should be nothing
very terrible in them. 1t is not generally
considered a misfortune that one is forced
to increase the capacity of his plant. Inc
interest on an issue of $40, 000, 600 bonds. at
5 per cent. would not be more than equal
to / per cent on the common stock, so
that il would not seem to hurt the divi-
dend prospects of the common stock
holders very much.
The movements of the grangers were
perhaps the most interesting after the
decline of the steel securities. All these
securities except Atchison preferred
made a sharp advance during the morn
ing hours recovering about half OF their
previous decline. st. Paul, for instance.
advanced from 149 ga to 155 IA, or
3 1-2 points, after an extreme decline
of u IA, while Burlington advanced
from 143 IL to 146 rs. OF 3-s points.
After this squirt, due to inside knowledge
of the Burlington melon, there was quite
as rapid and quite as radical decline
to near the lowest prices again. Atchi
son preferred intrinsically cheaper than
any of the other stock, did not partici-
pate in the first advance, and was weak
est on the later decline, thus closing
with the most important net loss of the
day.
The Burlington company directors at
their meeting yesterday declared the
regular per cent dividend and in addi-
ton adopted the plan of issuing new
stock to the extent of 10 per cent of the
present capitalization. The new issue
OF stock is to be sold to the present
stockholders at par and TO be distributed
pro rata. or one share for every ten
shares held. It will be seen that with
the stock selling at 145 the right" to
subscribe is worth 4 1-2. The proceeds
OF the stock sale will be used for con-
struction. The Burlington company has
made its stock very profitable to its
holders recently. In addition TO the 6
per cent dividend there have been these
melons" frequently, and it is under
stood that they are not all cut yet.
There are still bonds to be refunded.