The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-12-21
The Financiers Feel Easy and Turn
Their Attention to Possible Re-
suits in Central America.
TACTICS ,0F THE STEEL TRUST
NOT UNLIKE THOSE OF THE GREAT
STANDARD OIL COMPANY.
Wealthy Underwriting People Com
PEELED to Put Up Cash to Make
Good Their subscriptions.
Special to the Indianapolis Journal.

NEW YORK, Dec. 2O.-The action of a
group of strong banks in providing $50
100000 emergency credit to protect the stock
market against further undue depressing
having Gained the disquiet over the none
tary situation, Wall street is turning it's
attention to diplomacy, statecraft and war.
1t is watching with great interest the
moves being made in the Venezuelan mat
ter and -peculating on the outcome. While
the open expression and possibly the hon.
est general belief is that the dispute will
be arranged without rupture of relations
between this government and the old world
powers, an undertone of uneasiness is felt
in the financial district. There is nothing
particularly soothing in the spectacle of
warships of Great Britain and Germany
and other foreign nations hurrying to
South American waters, or in the fact that
the United States has massed there already
the strongest fleet of warships and armored
cruisers ever brought together under the
American flag. This display may cenduce
to peace, but at the same time there is
something almost terrifying in the grim
and bristling front presented by the great
powers on earth which profess ardent de-
sire to avoid trouble and are. at the same
time, clearing their decks for action and
sending women and children back into the
bomb-proofs. Spectators figuring on the
possible effect Of serious troubles of war
like nature are by no means agreed that an
actual conflict will spell ruin to securities
They recall what happened when the Span
ish-American war began. During the pre-
liminary moves the stock market steadily
sold down, but the very moment war be-
rkaf rod
and it did not stop advancing for two
straight years. The turn was at the time
Of the famous secret midnight meeting
held at the residence of the late Vice Pres
ident Hobart In Washington, at which the
leaders in Congress- members of the Nc
Kinley administration and several of the
great New York financiers were present.
The Wall-street contingent hurried back
to New York. prepared to unite the finan-
cial interests in supporting values. believing
that the war announcement would be fol-
lowed by collapse. To their amazement and
joy there was no occasion for more than
demonstration of willingness on their
part to stand under the market The great
American public rushed in and bought Sc
curities right and left. 1t was way the
people had of showing their confidence in
the government 1t seemed as though men
with money regarded it almost as an act
Of patriotism to go in and buy stocks. 1t
was bet on themselves and the old flag,
and visible proof to the civilized world
that we believed in ourselves. Remember
ing this remarkable demonstration, specu-
lators are more than half inclined to believe
that real war between the United States
and the allied powers might be followed by
another similar movement, although thew
admit the possibility Of very SHARP break
preceding it.
The steel trust, in gobbling I'D the Union
Steel Company, its strongest rival.
strengthens itself in many ways. 1t Sc
cures valuable addition to it's coal and
coke properties, several mills of latest
construction, and at the same time gets rid
or competition that threatened to become
| annoying and possibly dangerous The CEN
tral figure In the Union Steel Company is
II. G. Frick. who is also member of the
board of directors and executive COM
mittee of the United States Steel Corpora
ton. To forestall possible criticism over
the purchase. Judge Carey, Of the big
steel trust, explains that the properties
acquired were under construction before
the formation OF thf billion dollar trust
any unpleasant comment about any alleged
| 'hold-up" or inside deal, and will doubt
less have that effect in well-informed
| quarters. The great trust is gradually
| getting itself in shape to monopolize the
| field as much possible on any back
tracking in prices which may occur, at
| tended, as 1t will possibly be. by reduced
| production. 1t has already decided upon
| the policy of charging competitors greater
prices than heretofore for materials fur
| nished them, and at the same time mark
of IF ifc
! products. This policy will cut both ways
against competition. 1t is i'm one sense
a limited application of the same principle
| put in force by Standard Oil during the
years it was able to obtain from the rail-
| roads rebates on all petroleum shipped
| whether by itself or other people in the oil
| business. Armed with that advantage the
| Standard Oil Company killed competition
and obtained virtual monopoly. The Steel
Company cannot go so far. of course. but
| as ii is in absolute control of a very large
| percentage of the raw material il has
| decidedly the inside track, and despite its
manifestly inflated capitalization il is like
| ly TO come out first best in the life and
/ death struggle for business. the end of
which will be marked by the survival OF
| the fittest." The steel trust is ever i'm
| the market for choice iron and coal terri
| tory which might, at any time, fall into
| hostile hands and become a weapon against
| it in trade warfare 1t has even gone so
far as to obtain and keep alive options on
| prospective very valuable iron areas in
| MeXico-property that is now dormant.
|
| XXX
The recent general selling of standard
stocks and other high-grade securities has
revealed the fact that large numbers of
wealthy people were obliged to sell the
contents of their strong boxes in order to
make good on underwriting and other spec
ulative commitments. These gentlemen fell
| into the habit of taking without inquiry or
demur alotments of underwriting dis
tributed by their bankers. They were rare
ly called upon TO pay more than one or
| two assessments on subscriptions, and the
way OF fat profits looked like easy
money" They grew careless and I'm many
instances allowed themselves to be drawn
into schemes to an extent they did not real
ize. Hard times in the money market came
! and then bankers who had been carrying
their rich friends and clients or drawing
on them sparingly suddenly laid bare the
unpleasant fact that all subscriptions must
| be paid in good, hard cash and at once
Not few Of the rich gentry laid down or
their subscriptions. but a majority came
to the front with their checks. although &c
do so they were obliged to sacrifice securi-
ties they had put away for permanent i'm.
vestment. II was very hard on them TO be
forced TO take the lids OF their strong boxes
or TO dig deep into their safety vaults. The
lesson the experience has taught them viii
not be soon forgotten and underwriting
will be less popular than formerly. / an
informed by disciples and players of the
national game that the habit of ''owinf
into" jack-pots Is pernicious. and that Il
very often leads to trouble and confusion
and to tossible reputation. The same ruls
| saaps ~ auDly to much of the under writ