The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-11-14
THE ONE DISTURBING SYMPTOM.

The apprehensions regarding the outcome
of the anthracite coal strike having disap-
peared, the only disturbing symptom in
the business conditions of the country is
the speculative trading in stocks of doubt
full value In stock exchanges of which New
York is the center. So long as the traders
can get money business will be active and
and bankers are conservative prices de-
cline. During the past few days prices de-
clined until Wednesday. when powerful
influences" the public is informed. checked
the decline and gave firmness to the
market.
When the decline began several causes
were assigned, among which was the al
legged hostility of the President to trusts
and mergers, and the intimation from the
treasury department that Wall street would
be left to care for itself SO far as sup
plying money to relieve a stringency was
concerned. The main cause Of the decline
is not mentioned. which is that a large
part of the stocks bought and sold have
no money-earning value. At the present
time, when United States refunding bonds.
bearing 2 per cent. interest. are selling for
1904, any stock earning dividend of per
cent. should sell at par. under the exceed
ingly prosperous conditions. If railroads
which earned 10 per cent. more last Oc-
tober than they did during October, 1901,
cannot earn dividends on their stocks, it is
fair to assume that the period when they
will be able to do so is very remote. Many
roads are spending a great deal of money
I'm improvements. which may have its eff
feet in few instances. One road the stock
Wednesday at less than IS has two issues
of preferred stocks. the first of which is
quoted at less than 65. There Is no real
value in such a stock, since there is not
a dividend. Their only use is for gam
blins-one man practically betting that
they will sell at given price and the other,
who sells, that they will not. The pur-
chaser puts up a margin sufficient to pro-
tect the broker against loss. He borrows
the money upon collaterals, usually suffi-
cient to make the lenders safe. II the
money market is easy the gambling pro-
ceeds briskly. but If the reverse. rates of
discount high and prices fall.
During the past three years the so-called
trusts have put millions of dollars of their
watered stock upon the market At first
many of them were sold at prices above
the earning capacity of the combinations,
and many of them have either become
worthless or are selling at small prices
Many millions of dollars are tied UP in
such stocks. and probably banks have
taken such stocks as collaterals. With the
exception of the Sugar Trust, the stock
of no industrial Is selling at par to-day.
The stock of the United States Steel Cor
poration waivers about 361s and its pre-
ferred stock is quoted at Sr5. The stock
of the Republic Steel Company is quoted
at 49, Many of the industrials are no longer
quoted. Investors are afraid of such stocks.
There is a feeling that many OF the stocks
are now quoted above their value and that
an easy market is all that can hold them
TO present quotations. If all the water and
wind could be squeezed out of chem with
out causing something like pane in the
money market it would be good thing
for the country and for legitimate industry
and business. And yet the bankers who
really sustain these stock gamblers would
have the country believe that it is the duty
of the government to keep the banks sup
piled with funds that this proftless specu-
lation may be kept alive, thus demand
ing more than do the great industries OF
the country which create wealth.