The Savannah morning news., 1903-07-24

Nobody seems to know why there
is such a lack of confidence in the
United States Steel Corporation, known
as the billion dollar steel trust. In it's
last report, published recently, it made
an excellent showing. After paying
fixed charges, per cent. on its pre-
ferred and per cent. on it's common
stock, it had many millions of dollars
| surplus. And yet it's shares of common
stock sold down to % on Tuesday and
its preferred stock to 20.
On Tuesday there was craze to
sell. The stock was thrown on the
market in great blocks. The holders
| of its seemed to be panic stricken, and
unable to get rid of it fast enough. 1t
is stated that there are $4,000 holders
of the stock scattered all over the
country. Among the largest holders
at one time were John d. Rockefeller,
Charles NJ. Schwab, H. C. Frick and ].
P. Morgan. They may still be among
the largest holders.
1t seems that on Tuesday the panicky
feeling became apparent when it was
reported that large holders of the stock
in Pittsburg and Chicago were prepar-
ing to throw big blocks of it on the
market. No reason was given for this
wholesale movement to sell. Inquiries
at the office of the steel trust failed
to elicit information as to the cause
of the craze to get rid of the stock
1t was asserted that there was moth
t,,o he
1t was pointed out that it's condition
was in every respect better than it
was when the stock was selling at
double the price it was then bringing
AS far as the public knows, the cor
poration is in a sound and prosperous
condition. 1t is known that it has or
ders that will keep all of it's plants
busy for months. What, then, is the
cause of the haste of the holders of
| its shares to get rid of them? Is it
that there is a belief that troublous
| times are at hand for the iron and
steel trade and that the big concern
will have a hard time of it to meet it's
fixed charges? There does not seem
to be any ground for belief of that
sort. The country Is prosperous, and
the demand for steel products is likely
| to be as great as it is at present for
many months, and perhaps for several
| years.
1t may be that the majority of
those who have been throwing their
shares on the market did not own
them. but simply held them on a mar
gin. In other words, they We're
| gambling in them, betting that
the price would advance and
expecting that they would be
able to sell out at a profit, and get
a big income in dividends besides.
When the market began to decline they
sold good stocks in order to hold their
steel shares-that is, to make their
margins good. But the decline became
so great that they got frightened at
the amount of their losses, and in a
panic rushed to their brokers with or
defs to sell. That may explain why
so many shares have been thrown on
the market, thus forcing down the
price.
Doubtless what added to the feeling
of uneasiness was the failure of the
steel corporation to try to protect its
shares. With many millions of dol
lars in hand it would seem as if it
would have bought up the shares and
put them in it's treasury, and thus have
saved the dividends on them. At the
price at which the shares sold on Tues
day the common stock would pay Is
per cent. That ought to have tempted
the steel corporation to buy its own
shares. But it seems it didn't, and that
fact helped to weaken confidence in
the ability of the corporation to con-
tinue TO pay a dividend on its common
/ stock.
Mr.. LaBountie, the Buffalo clerk who
managed to spend 100000 on salary