New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-11-08
Financial.
The Financial World.

quoted which It did quickly the attention =,
the Street and II might be said OF the invest,n,
and speculative community everywhere wa.
wholly concentrated on the Steel stocks Tba
direct effect Of the election on the market IA,
confined to an upward furry In the tractio,
stocks; the idea being that the new nuniciDsI
administration would be more friendly 70 ths
companies than the present one. Whether thi,
idea be true or not IT is very certain that thar.
was not enough IN it to sustain the stocks ana
their sudden advance Wednesday morning VA,
followed by a recession which put them back p,
their starting point. After this the Steel stocks
had the floor.
One fact IN relation 70 the decline IN the,. A,
worth noting. Two weeks ago yesterday. rba
word came from a Pittsburg interest which has
been right in its bear predictions on the stssls
that before the end Of two weeks. Steel pre-
ferred would break 50. This point was given Al
positively that bets were made on u. The STOCK
was then between IS and 50; and il was further
said that the break would come toward the end
OF the two eeks- The accuracy OF this proph-
ecv-which was evidently made on knowledge
may be seen in the record There was nothing
much done in the Steels until wednesday ast
and then the operations began. Trading in The
preferred suddenly rose that day % 5000
shares, and the price fell from sos 20 57Ss Next
day. the trading sweIed to 5000 shares and
price Lel4 "a 10 at1s ne cay dLLer
/ trading reached a total Of 222OOO shares and
the prediction was made good-the stock broke
5S. the lowest quotation Of the day being point
below this. The liquidation appeared 70 os over
then. and yesterday there was a small rally. the
closin. price being 537s
One OF two differences may be drawn from
/ these facts Either the Pittsburg interest re-
ferred to knew Of some large loan in which Steel
preferred figured as collateral which would
/ have TO be sold out. OF they counted on the re-
auctions in the price Of steel products which
they knew were to be announced. as furnishing
a favorable opportunity for making a raid on
the stock. It makes little difference which The
fact remains that the stock fell. as predicted.
II has been figured out that from highest to
lowest, the shrfnkage in the market prices OF
the Steel securities, totals over 437 millions.
Not taking extremes il may De said that The
loss averages well over 800 millions and this for
one body OF stockholders. II Is absurd % argue
that this is nothing but pa per loss 70 investors
and only spectators margin have suffered
In the first place. thousands Of investors have
been frightened into selling az loss by the con-
tinuous fall. and some have been forced TO DO
so; and in respect to margin buyers. IL may be
said that as Z rule 70 which exceptions are few.
all new stocks find their first market with the
margin buyer. since the SPECTATOR always pre-
cedes the investor. He has bis place IN the
financial and commercial world. as the pioneer
has IN the settlement OF new country.
Furthermore. the dividend on the common
stock has already been cut in halves: the out
look for the next quarter may be measured oy
the fact that the dividend is being sold specu-
lativeIy at from 15 tc % cents on the dollar.
and with the reductions in the price Of the COM
pany's products. the dividend on the preferred
seems in danger II is a dspiorable condition OF
Affairs and the 5a0araI market for securities has
yet to feel It's fun effects
The various reductions officially scheduled in
tile price Of steel products are merely the or
cia1 recognition Of state OF things already ex-
isting. They were not ordered until these prices
were actually being made IN the open market
This is quite clear. The disputed question now
is whether the price of steel rails has has not
been cut. Officially it has not. but one can find
plenty Of people connected with the steel trada
who insist that rails are and have for some time
been selling at S24 per ton instead OF the sched-
uled price Of SIS On the part Of the company.
II Is reported that II is asking OF the railroads
a reduction in freight .ates if a formal cut IS
made in the price Of rails. - is difficult 20 see
how the request can be refused The railroads
are the biggest customers Of the Steel company;
and the Steel company is one OF the biggest Gus
toners Of the railroads TIE depressed state Of
the steel trade makes it necessary that each
can lie seen hcw railroad revenues will be ad-
versely affected by a shrinkage in man1fact-
uring business generally. since It is impOss-o.e
that only the steel and iron industry can su-Ier
loss and shrinkage and no other branch OF trade
What must happen. as it always has. is that
the losses resulting from contracting trade and
lowering prices. will be distributed over the
whole field Of industry. each branch beins called
UPON TO bear its share. and it is consideration
OF this fact which dtsposes a good many
thoughtful observers OF the market 70 loOS 1or
further decline in the railroad list Speculative
". the railroads cannot cut away from the n
dustriaIs if the industrials are falling because
Of adverse trade conditions
Up to the present, the check TO trade in me
East has been compensated BY the continuance
of good trade in the West. resulting from the
generally prosperous condition CT the agri-
cultural sections Good crops and good prices
for them account for thts-and Of course. this
is large factor on the favOra0le side II the
situation. The gross earnings Of nearly al TIE
roads still showing Increases. though the
net earnings are not so satisfactory Most OF
the roads still report their lines crowded Win
business. and the officers say they see no -hlns
in sight yet to indicate setback
This condition is reflected IN the stock market
The railroad list has stood the various sh
the market has lately had. including the heavy
drop in the industriaIs, 18th remarkable arm
ness; indicating that liquidation IN this e.
partnent has spent is force. temporarily al
least 1t $ well. however. TO point out that the
roads have Of late heavily increased, and are
stiu increasing. their stock and bonded ooAsa-
tons the latter particularly. These Increased
demands upon net revenue put them III a con
dirion where increased business IS necessary