The Birmingham age-herald., 1903-08-30
INDUSTR|ALS YET
 UNDER PRESSURE Wind and Water Enough for
 Even More Speculation
  MONEY DRAIN SOON GINS  Wall Street is Beginning to Dip Into Presidential Politlcs-Gorman and Parker Considered Among Dem
 ocrats = Financial Gossip.
MONEY DRAIN SOON BEGINS
BY W. G. NICHOLAS.

industrials are still under pressure. The wind and water has been squeezed out of a good many of the big combinations, but there still remains enough to impart to the market situation considerable spec ulative interest. It has become quite the habit among industrials to pass dividends which is by many regarded as the first step toward reorganization.
 More than two years ago John w. Gates went on record as saying that the next big money made in Wall street would be in congratulations. After he gave utter ance to this sentiment he himself attempt ed to float three or four schemes and took active part in the organization of others, noteworthy among which are the shipbuiding and Realty projects. Both of these hotatons ended disastrously to the underwriting and speculative contingent in Wall street. Now there is open talk that the dividend on steel common will either be cut in two or stopped altogeth- CT. It is known that a strong party in the board of directors favors the latter course Much of the decline in the shares of this corporation Is due to anticipations
 
 issue. This is not because the company is not earning dividends, but there is felt to be a need of strengthening the working capital without adding to the bonded in- debtedness.
 The company Is authorized to convert $2O0,0O0.0O0 of preferred stock into bonds and also to sell S5O.0Oo, 900 Yprth of bonds. This bond conversion plafHfs supposed to have met with total failure, although this s, ffa4a a6r n1 thar Ia nothing to show that the management has not proceeded to sell It's s50 100000 of au- thorized new bonds. In fact there is well-grounded suspicion that 1t has dis- posed of at least part of this authorized issue, which may. account for the low prices reached by the senior securities of the big steel trust
 The conservatism of the railroads which resisted the temptation to increase divi- dends commensurate with their earnings during the fat years is now being fully appreciated. Those roads which made most generous distribution of net earp- ings among their stockholders are now feeling the pinch. This is conspicuously the case with Atchison. That company earned from to 10 per cent on its common stock and paid per cent. In the Improvements extensions and bet terments undertaken by the corporation ample need was found for every spare dollar and more. It was found advisable a few weeks ago to summarily stop the expenditure of any more money on the road, excepting what was imperatively necessary. The reason for this was inabil- ity to sell bonds or borrow money on reasonable terms
 A director of the Atchison has stated within the last week or two that 1t was a great mistake to have started In on the payment of dividends on the common stock Union Pacific is supposed to be rather better situated than Atchison be- cause of the fact that 1t can use the enor- nous net earnings of the Southern Pa- cific in bettering the physical condition of what is really the western end of the main Union Pacific trunk line, namely, Central Pacific from Ogden to the coast. This piece of property is legally part of the Southern Pacific system, which gives excuse to MT. Hartman for using the money of the old Huntington lines in the south for strengthening the direct Omaha-San Francisco line, which was originally starved to carry through South ern Pacific construction. St. Paul. Rock Island Northwestern and the Hill lines in the northwest have resolutely refused to expend anywhere near the full amount of the net earnings in dividend disburse- ments. Consequently they are in a posi- ton to go ahead with their Improvements. Northwestern has treasury assets which would give ample warrant for doubling It's capital stock In the way of a stock or bond distribution to its owners and still leave the property in a position to pay big dividends on the enlarged volume of paper. St. Paul has 10000, GOO cash on de- posit. Illinois Central is also well fixed. Nobody knows the exact condition of the Gould properties, either east of west of the Mississippi With these properties the element of expert bookkeeping enters more largely than in any other corpora ton in the world and only the insiders know the exact situation.
 The drain upon the east for money with which to move the crops from the west to the south Is due to begin In a fortnight. There Is a theory that the de- mands upon the east will not be as great as usual this year, but that kind of talk is heard every fall and Is received with skepticism. It is no doubt true that the south and west are full of money" but it is also true that the banks throughout those great sections of the Country carry large balances in New York andd other eastern centers which are subject to sight draft. Not only is this the case, but half the banks beyond the Mississippi river and south of the Ohio have local money loaned on eastern paper. A demand for the repayment of any considerable amount of these loans would be reflected instantaneously in Wall street and upon the money situation in general. Western CTS combat the oft repeated statement that the east has to supply funds to move the crops in the surplus states. They ex- plain that in reality the east Is a debtor to the west for an immense sum and that the money sent west is merely part of that on deposit. In other words the west has money of it's own with which to do all its own business and still leave great sums in New York, Boston. Phla- delphia land other eastern centers. It is small wonder. therefore, that sensitive people in the west resent the charge that they are obliged to call upon their east ern friends for financial help. Much is likely to be heard on this subject in con- gress next winter when the attempt is made to put through financial legislation.
 Speaking of legislation of a financial sort 1t would appear that those who are advocating currency and banking reform have by no means abandoned the hope of securing what they want at the hands of congress. Western opposition to the plans proposed has dampened ardor some what but not killed 1t. A financial strin- geney this fall and next winter conse- quent upon the handling of the cotton and grain crops may furnish an object lesson and prove the need of legislation. This is one of the things which may be in store. It Is taken account of by bankers and operators in the stock market and is the real underlying strength of bear ar- guments