The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-10-10
TAKING IN SAIL.

The action of the United States Steel
company in reducing its quarterly div
idend by so per cent has been discount
ed by the conditions lately prevailing
in the stock market, but none the less
is it a profound indication of the
changes that have been and still are
taking place. The industries of the
inflated are taking in sail. They have
struck belt of unfavorable weather
and find it impossible to maintain their
promised rate of profit upon gigantic
and inflated capital.
This was bound to happen as soon
as the general industry of the country
received any setback. The capitaliza
ton of our mammoth industrial trusts
was founded upon a period of activity
uneXampled in the whole history Of
this country, and upon the right to do
business only under the protection Of
high tariff duties and by robbing the
consumer through exorbitant prices.
AS long as these conditions were I'M
disturbed, concerns like the steel. trust
could pay dividends, and other trusts
less legitimate and less warranted by
business conditions could make fair
showing.
With the change in the market con-
ditions which is now apparent to every
one, the industrials must prepare to
show what they can do when fair
weather no longer prevails. The state
ment of the steel trust is by no means
a bad one. While there is a falling off
of unified orders on hand amounting
to more than 100000 tons, still the
bulk of the orders actually received,
aggregating nearly 100000 tons, indi-
Gates very handsome business. Were
it not for the enormous total of stocks
and bonds with which the concern has
been burdened, it might do very well.
Could its Indebtedness be scaled down
about SO per cent, as it ought to be,
it would be able to make living and
fair profit even under adverse condi-
tons.
In this connection it is interesting to
observe that the United States Glass
company, of Pittsburg, has sent out Of
fetal notice that at the Forthcoming
stockholders meeting vote will be TAX
en- to retire $1,S00,000 of it's common and
preferred stock, thus reducing its total
capitalization of 100000 by nearly 40
per cent. To do this large amount of
bonds. will be issued for the conversion
and retirement of the stock, but the
net reduction of total liabilities will
still be more than $1,080,000 This is
the line which all the great industrial
corporations should be taking If they
expect to weather future storms. Those
Of them which, like the steel trust. are
already obligated to pay bonded debt.
practically equal to their legitimate
capitalization have trouble in store for
them. Those that still have margin
for bond issues and stock retirement
will do better. Those which refuse to
take in sail in either direction are
steering straight for the rocks
In capitalization and stock sales most
of the industrials have anticipated the
development of the country by ten or
twenty years. If they insist that the
industries which they represent shall
pay something at the present time on
this immense total, they will simply
take all value out of their securities
and throw most of their companies into
liquidation. If the water is squeezed out
of stock issues by judicious manage
| ment, as it has been squeezed out Of
stock valuations by the market, the
industries Of the country will be in a
better position to meet the slackened
| pace that already marks them. Con-
sentative men are taking in sail, not
| because there is any pronounced mis-
fortune ahead, but because that is the
best way to avert misfortune. Those
who fail to heed the warning signals
are booked for disaster.