New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-07-06
fIHauslal.
The Financial World.


ton of higher prices. Nearly all the 1eadfns
stocks closed higher on Thursday than they ala
at The end OF the week before The improve
nieht extended from fractions to several points
Continued Increase in railroad earnings (exeAnt
those Of the strictly anthracite roads), and the
continuance Of good crop conditions account Tor
the advance
1t was the latter part of June last year that
we began to set drought reports from the West:
and they continued to come in until it became
evident that the country was in for a corn crop
failure. The effect on the stock market may be
inferred from the drop in Atehis6n. which from
high IN the S0's sank to low in the TOs-in fact
In about three weeks it dropped nearly eishteen
points. The Atehison is a corn road and the
speculative holders OF the stock threw 1t over
as they did other stocks. in the belief that the
corn loss would cut the earnings down most
seriously. 1t did not. however This year the
bad reports we receive are Of too much rain
1t may be there have been seasons in the past
when the great corn and wheat growing regions
of the west have had short crops from an sx-
cess Of moisture. If they have. it is not easy
to recall them. But we all know how they
have repeatedly suffered from a lack of moist-
ure One may dismiss the fear that there IA
any trouble ahead this year from too much rain
Storms may do bad local damage but the slight
general loss in winter wheat from wet harvest
for by the assurance these rains give Of great
returns from all other crops. and principally
corn. That this is the prevailing conviction
among the people who make prices in the stock
market, the upward movement Of stocks at this
time is sufficient evidence
Last year. this class saw IN the great drought
a great disaster: and their wholesale selling
dropped the market badly. though only for a
time. A few remained firm in the conviction
disturbance. because OF the several preceding
years Of prosperity. There was. it We're. a
big surplus accumulated which could be drawn
upon. One of the few who saw this was Mr.
Morgan. Mr.. Keene. who had taken the bear
side, found the market showing a rising ten
deney at a time when he supposed the cOnfrma-
ton of the reports of the corn loss would droo
il still further. After struggling for a while
against the tide, he talked with Mr. Morgan.
who convinced him that great as the loss was.
the surplus to be drawn against was so large
that there would be no serious diminution in the
national Industries. and consequently no ma
terial dinninutien of railroad earnings. il any
Mr.. Keene was sufficiently impressed to at once
change his position.
We know now that Mr.. Morgan's view was
correct; but also know that the country
could not stand another such agricultural loss
as IL had last year. and still go undisturbed
That was why the crop situation this year has
been more eagerly watched and discussed with
more earnestness than usual When our worst
reports now are Of too much rain. we may rest
easy about the future.
With this outlook. the market ought to do
we'll in this second half of the year. II should
only be q sale when it becomes which 1t GER
tainly viii ct intervals. speeulatively over
bought The main movement of prices ought
to be upward, corresponding TO the activity Of
the national industries. and increasing earnings
promising .aTger returns to the investor.
whether his securities be stocks of railroads or
OF manufacturing corporations.
The May statement of the Pennsylvania Rail-
road might be pointed to as an evidence of the
state of trade but it would be scarcely correct
to offer the whole of the heavy increase it
shows as argument for the general increase
in business. Against it must be put the large
decreases for the same period of the Lehish
Valley and Reading Companies. These purely
anthracite roads have lost and still are losing.
through the labor troubles; while the PennsyI-
vania gains greatly through the enlarged de-
mand for bitumineus coal This has to be taken
into account; when il has been. however there
remains a large percentage Of the months in
crease which results from other than temporary
eondtions and if we turn in another direction.
we find the Burlington road reporting a heavy
increase, although this is a corn road, and was
enc considered sure to suffer severely frem the
corn shortage. The increase in its general mer-
ehandise traffie more than compensated for the
loss in grain trafflc-a sure proof of the cor
rectness of Mr. Aorsan's view. that the country
had accumulated so large a surplus that It
could stand last years losses without incon-
venienee
The statement of the United States Steel Cor
perstieh fer the last quarter Is in line with the
above If its earnings were increasing while
those of the railroads We're decreasing, it would
be cause for wonder Most surely the s1s-
picion of bookkeeping methods would be
aroused But if we that the companies
transporting products are enjoying increasing
traffic, and that the companies manufacturing
products are reporting enlarged business the
two logically mt in; and the great earnings Of
the steel company for its last quarter are the
complement of the last monthly reports Of the
Pennsylvania. the Burlington. and other roads
As to the market movements Of the steel stocks
the technical position is confessedIy a-aInst
much advance in them. The corporation viii
earn its dividends and pay them; but the vast
masses of It's stock are held by the public but
not disested yet. That is not enough has gone
into permanent investment to make market
advance in the price an easy thing to bring
about in the face of a set effort to bear them
by clique of operators too strong to be ignored.
The largest advances of the week were made
in Rock Island and Colorado Fuei-tvo stocks
which are so held that they may be said to
have market only between insiders. Next to
these was Illinois Central. which recorded a net
advance OF four points from 100 TO 104 This
stock is one Of the favorites of the Western
bull party, who lose no opportunity to advance
1t. Missouri Pacific has been A good second 10
IT. but the other leading Gould stock western