The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-09-27
THE LAKE SUPERIOR COLLAPSE.
THAT THE LOSSES MAY
REACH ABOUT s3o,OOO,0oO.
Steel Bond Conversion Scheme and
sfeeI Common Are still Topics of
Financial Interest.

easily in obedience to manipulative action,
but whenever quotations improve a point or
two stocks are offered for sale freely and
there is rapid subsistence. This experience
has been repeated so frequently that ex-
perts look specifically upon any improve
ment which may appear in prices. The army
of commission payers, without whose pres
ence in the market there is dullness and de-
spondency about brokerage Offices, are dis
couraged. They cannot beat the game
and their capital is impigned upon every
time they attempt to make a turn. This
the trade and drives good people away from
the market. One trouble seems to be that
the rich men have been so badly hurt by
the decline in securities values that they
are in no mood for concerted action for an
advance, much as they would like to see
one. The little people have lost confidence
in the speculative situation, and the result
Is dullness amounting to almost stagnation
the exchanges. The succession of col
lapses among overcapitalized industrials
leaves the financial district full of discred-
tied bankers and promoters. Their failures
have killed speculation for the time being
and dragged down the prices OF many Sc
curities OF undoubted intrinsic merit. The
Increased cost or operation or railroads has
also contributed TO the same end The fact
that sums of money, immense in the aggre-
gate. are still tied up In underwriting and
syndicate schemes is another factor of i'm
portance in the general dizziness.
The collapse of Consolidated Lake Superb
or supplied interesting chapter in the
financial history of the wook. 1t would APP
pear from the latest surface Developments
that practically all of the S30O0O,000 cash in
vested in the enterprise. mostly by Phila-
delphia capitalists. will be entirely wiped
out. Purchasers of the property will have
to take care of a mortgage Indebtedness to
the amount of 50, 800, 600. plus the wages due
workmen. amounting to about $4,000 addi-
tional Wall-street gossip has It that the
properties will eventually drift into the pos
session of the United States Steel Corpora
ton, and that plans have already been ma
tured by which insiders in Consolidated.
who are also insiders in STEEL will be given
a chance to rec0up, a part at least, of heavy
losses. IntimatiOn Is heard that syndicate
will be formed TO take over the property at
the auction sale under the Speyer foreclos-
ure, this syndicate, after proper lapse of
time, TO make the goods over to the steel
trust at figure which will net a good round
profit Of possibly 100000. If deal of that
kind Is carried through only very few
men will be the beneficiaries, and the great
mass or STOCKHOLDERS IN the COnSOilQate0
Lake Superior corporation can paper the
walls with their certificates of stock or sell
them to the ragmen. 1t is the fashion now
to characterize Mr.: F. H. Clergue, promoter
of the Consolidated enterprises, as a vision
airy proposition who drew on his Philadei-
phia hackers by rose-tinted representations
having small foundation in fact. Those who
are better informed have no words of harsh
criticism for Mr.. Clergue They say that his
plans are well grounded and that every
prospectus promised would have been car
- T. - IL
tie more capital. He had water power, iron
mines, nickel mines. hundreds of miles of
railroads and hundreds of thousands Of
acres of virgin timber land; besides COM
plete iron and steel mills, fleets of vessels.
enormously valuable dock facilities, and all
the elements that enter into the creation Of
a vast industrial enterprise embracing an
infinite variety Of products. The properties
are still there, and will, doubtless, In time.
be developed for what they are worth, al
though the investors in the expiring Con-
solidated Lake Superior Company may new
er profit by the results of their past invest
ments. The big steel trust has had its eye
on the mills, water power and metal depos-
more than likely they will pass into the
NAV of the leviathan company.
The worst feature in connection with
Consolidated Lake Superior is the sentiment
tai effect upon the public mind. People cam
not understand why men as rich as the
capitalists are SUPPOSED to be who have been
behind that enterprise, should deliberately
abandon a s300O0,0O0 cash investment which
might be saved by taking up 100000 I'M
deriving mortgage. This circumstance is
taken as confirmation OF the bearish theory
that these men have been harder hit than
commonly supposed and that their necessi-
ties must be extremely urgent TO permit of
such terrific sacrifice. The incident is hav-
ing a severely depressing influence on the
hon In Incl do
the calamity has been measurably dis
counted by foreknowledge of what was like
ly to happen.
1t is of common report that a good many
Of the subscribers to the Morgan steel bond
conversion syndicate will decline to accede
to the proposition for nine months extern
sion of the syndicate and will ask for their
share of the securities in the hands Of the
managers OF the deal. Subscribers are given
the alternative of sitting i'm with Mr..
Morgan for another nine months and pay
ing over TO him their percentage of $5.000000
OF the sa0.000.0O0 contingent liability. or of
paying their proportion of the entire S2O.Oo0,-
600 and Withdrawing their securities. AS re-
marked I'm this column last week. not a few
of the subscribers TO this, syndicate are in
urgent need or the securities deposited with
the managers OF the deal and Will stand n
| full assessment I'm order to obtain posses
sion of them. either for sale or use col
| lateral. Semi-official announcement having
| been made that the SS0.00, 900 I'm preferred
steel stock deposited with Morgan x Co.
had been converted into bonds last May or
| June IL is safe 10 say that whatever the
subscribers get back viii be in the form OF
bonds instead of stock. Official information
is still lacking as TO how many of the $780,
oo0.oo0 in new bonds have been sold for ac-
count OF the Steel Corporation. or the prices
| realized. If the entire issue has been dis
| posed OF and anything like S50.O0o000 OBJ
| tained therefor the treasury of the corpora
| ton VIII be fattened just that much. The
money Is all bespoke, however. and little if
any. will go TO swell the working capital of
| the trust.
| The street is still I'm doubt as 20 what is
| going 10 be done with steel common. The
question Will be settled early i'm October.
| and until official announcement Is made the
| impression will continue TO prevail that the
| dividend will either be reduced one-haf or
| passed altogether. Inspired statements have
| been set going several times during the past
week that the dividend will be maintained
at its present rate. but there is ominous
| silence on the part OF officials of the corpo-
ration who are in a position TO know what
| the management intends To do. Steel trust
| critics say that this silence now is as wicked
as the overcapitalization OF the corpora ton
was at the beginning, and that the stock
| holders have right To know what Is going
| on at least as soon as the spectators on the