New-York tribune., 1902-01-12
finanrial.
The Financial World.

publication of a statement OF earnings wbio.
seemed all that could be desired. The laborou.
work of ten days in putting up the prices 40
these stocks was undone in two hours N WA.
I said that large amount OF stock was sold Nv
insiders. Supposing IL was. there was not rora
sold than the market should have taken easv
with a record OF earning power such as tbs
corporation was able TO present. In these dav,
when it is hard TO get on solid security a.,
much 4 per cent for ones money Unitss
States Steel preferred. paying Z per cent, and
earning so much that its net income would nav.
TO fall away 40 millions and more before this :
per cent was touched-such a stock as this
might surely seem to be cheap at anything
under par. 1t was therefore, calculated TO dis
courage the average trader when he saw the
price of the stock slide down from 81 to 81
under comparatively light pressure Of sales.
Disappointment over the December showing
in the statement was an alleged cause Of decline
1t is not easy TO see why this should be- On
Saturday last and again on Sunday a semi
official statement was printed that the net earn
ings for the last quarter Of the year would be
in excess OF % millions. They were over %
millions. This should be good enough for any
one. A criticism of the report was that the
charge for depreciation was too small. This isa
fair subject for discussion. There be differ.
ences of opinion-there are. and among people
competent TO speak. IT turns the question Of
the character OF the plants.
There was not enough in this however, nor N
the alleged disappointment over the December
showing, TO account for the decline. The real
cause is that there is not enough public in the
market at this time to take these steel stocks in
any considerable quantity. They have the draw
back Of being new. and Of enormous volume
$40 millions Of preferred. Ten years from
but it is now and there is no getting away from
1t. The stocks have had market handling Of ths
highest degree OF skill: the volume OF them,
however and their newness is a heavy handi-
cap.
This is an advantage TO the investor however
disappointing TO the speculator. Any investor
believing in the company and it's management
and in the growth OF the steel industry. should
be well content to get per cent stock at these
rrice;- He can put the shares in his box, and
temporary market fluctuations need not disturb
the satisfaction he experiences in regularly re-
ceiving his dividend checks One recent pur-
chase OF this character was by a prominent
English steel manufacturer who took con-
siderable block Of the preferred stock for perma-
nent investment
To the disappointment over the market action
Of the steel stocks was later added the dIsQuet-
ing Cleveland bank sequel TO the COLLAPSE
Of the Everett-Moore trolley and telephone syn
dicate. This concern represented about Us
millions OF securities; and it IS stated that thirty
banks among it's creditors AS the Cleve-
land bank sheltered itself behind the sixty-day
clause. and even then had to fall II may bs
surmised that its affairs we're IN pretty bad
shape Deposits at the time OF closing wers
about S1.500O00-not a great thing for New
York or Chicago. but serious matter in Cleve-
land. Yesterday another Ohio bank went un-
der, dragged down by the other failure. II the
reports coming in about the distribution OF this
collapsed syndicate's paper among the banks are
true. all Northern Ohio will be in mourning
before the clean up is finished.
There would be nothing particularly disquiet-
ing in this affair. except to the people directly
in interest, If 1t were isolated and alone This il
IS not 1t is only the, far most conspicuous.
collapse of a lot Of similar enterprises scat
tered over the country. Therefore it is sign.
These promotions the children OF the
boom: they have been fed on one foOd-loansj
and now that the supply OF this food is rapidly
falling OFF. they shrink and collapse. There
never has been a period OF great prosperity
which did not produce brood OF such un-
healthy growths. and probably never will be;
and there never has been a time when they did
loan-food was cut of.
Now the significant thing is that the supply
has been cut of. This is never done voluntarily
II is only done when the lenders have gone to
the limit OF their capacity and lend no
more; or will not. If they stop on the side o.
safety. Therefore when we see these things
happening, ii is the sure evidence that tns
country's fund OF surplus money available for
new enterprises has been used up; temporarily
it may be, but long enough 10 give US a string
of casualties. of which we have at this time
certainly seen only the beginning.
The cleaning up process is going 10 hurt anu
the stock market will feel IL. sooner or later
There is nothing in the situation now TO cause
a break: and 1t is certain that many Of the
leaders in the Street are active the bull side
IL matters little whether they are there HUM
choice necessity. their work tells the same
Mr.. Morgans position is well known MI heend
is unfiinchingly a bull The principal railroad
men are bullish because they see their roaaS
choked with traffic, and say that there IS enough
in sight TO last twelve months. The coal roads,
for example. will earn more this year than they
did last. and last year was good one for them-
Looking over the country. it is hard TO md any
large railroad. or railroad system, viii does NOT
promise TO earn at least as much, as 1t earned
last year.
These are the solid properties. They are the
solid things upon which we can depend to Eoie
affairs in shape. while the rubbish is beng
swept away. with resulting hurt TO a great many
people, as ii must be when alleged securities srS
found TO have no market at any price and oahAs
fail Ohio has given warning that 1t IS s'0"
time for a man TO have his house in order
CUTHBERT MILLS
in Mexico. Central and South America When his