The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-10-12
STOCKSARFA PATHE7IC
UNITED STATES STEEL PREFERRED
FORCED DOWN TO Low PRICE.
Amalgamated Copper the Most Active
and Seemed to Resist the Cen
eraI Depression.
WEEKLY TRADE REVIEW
DECLINING DEMAND FOR IRON AND
STEEL PLAINLY APPARENT.
Railroad Earnings show Decisive In
crease i'm Their Net Return-Prog-
ress of Crops Favorable.


market vulnerable to very light selling.
Some of this was palpably professional
short selling and there seemed to be pro-
fessional contest i'm the late dealings. The
party of reaction centered their attack on
United States Steel preferred forcing it
down rs to So This stock sold at $50. last
month, but otherwise never sold before as
low to-day's price. The party favoring
support in the market seemed most active
i'm Amalgamated Copper. That stock re-
sisted the general depression and was
marked up at one time Ia over last night.
There was some systematic buying also of
Chicago & Alton.
The contest was wholly professional and
not based on any news so far as known.
London helped the depression here some
what and sold stock moderately. Fears are
entertained there that next weeks Stock
Exchange settlement may uncover some
embarrassment. The tone of the weekly
trade reviews was somewhat conservative
and reflected the state of doubt which has
been caused by the reduction in United
States Steel dividends and the decline in
profits in the iron and steel industries. The
reports of weekly bank clearings show
with the corresponding week Of Issf year
But in the analysis ii is found that the de-
crease is wholly due to sErinkage in New
York, Boston and Philadelphia, the four
other leading cities showing considerable
increase and the average for all other cities
a small increase. The market seemed en-
couraged by the bank statement and raj
lied momentarily. The increase in cash was
considerably larger than expected, but the
statement is so much complicated by the
merger operations by the National Bank
of Commerce and the Western National as
to throw it out of balance. 1t is inferred
from the small loan change that CONNER
with the liquidation in the stock market.
The market closed easy and quite active.
NEW SECURITIES APPEAR.
Developments during the week have re-
suited in a new outpouring of securities on
the market and an almost entire paralysis
of demand for stocks most largely for sale.
The effect has been a renewal of the feeling
! of depression and gloom which always
| gathers Wall street in a period of
| declining prices. The liquidation has been
Of a different character from that of the
! recent past, which manifestly forced
| by financial necessities due to the failure to
! find market for the many new securities
| formed out of recent promotion projects.
| This week the selling is attributed to dis
| trust on the part of holders over the indus
| trial outlook and over the future earning
power of shares in corporations. There has
been an occasional account liquidated,
| which seemed to be caused by the maturing
! of a loan on which extension could not be
| had, and for which the collateral therefor
! came upon the market. But the prevailing
| topic in Wall street has been the irritation
| and disgust of shareholders over the devel-
| opments regarding the properties in which
! they have embarked their money, leading
/ them to abandon hope of better conditions
| and to throw their holdings for what
| they would bring.
REDUCTION OF STEEL DIVIDENDS. .
The reduction of the dividend on United
| States Steel from 4 per cent to per
| cent. basis was the first of these develop
| ments. The long downward course OF this
| stock in the market seemed sufficient
| intimation of what was to come. But the
! fact remains that the common expectation
in speculative circles was disappointing, as
it was supposed the retention of the divi-
| dend involved a policy connected with the
| formation of the corporation which would
not be departed from while funds were
available for the distribution. The wisdom
| of this policy came in for criticism when
the corporation announced its bond issue
| and the necessity for increasing working
| capital which prompted the bond issue.
In view of the partial failure of the bond
offering and the marked decline In the rate
/ of net earnings and the heavy decrease in
/ the untitled orders on hand compared with
| last years corresponding quarterly state
ment, the wisdom of the present dividend
reduction is generally conceded by disin-
| terested financial critics. But this COM
mendation carries with it a criticism OF
having entered upon dividend payments In
| the first place, in view OF the enlarged
outlay ahead The wisdom of the reduction
is predicated upon an admission of the fact,
also. that a declining demand for iron and
steel is to be faced. The implications to be
| drawn from this prospect proved of so dis
| turbing a character as TO throw sentiment
into depression again. Iron and steel as
| a barometer of general trade conditions
| have a high authority in Wall street, and
| the proportions of the reaction in that mar
ket thus reduced TO statistics made deep
| impression. The dread of general trade
reaction is thus aggravated Stocks of
| companies in the metal industries were
most Immediately affected in some particu-
lar. especially Amalgamated Copper and the
railroad equipment companies. But no part
| of the list escaped the influence or the de-
preston.
SHRINKAGE IN STEEL STOCKS.
The enormous market shrinkage in the
steel stocks and the final outcome in the
dividend reduction gives rise to disgruntled
complaint of the original dividend payments
as bearing on stock market exigencies as
much as on financial policy. This spirit of
irritation over conditions of promotion and
hotation is enormously aggravated by the
disclosures contained in the testimony In
relation to the United States Shpbuilding
hasco. To- tone of much OF the discussion
in the neighborhood of the Stock Exchange
during the past week has been OF bitter
ness and scope that Wall street heretofore
has regarded as narrow and prejudiced
overcapitalzation OF corporations is one OF
the least heinous offenses found in the list
laid at the doors of the leaders of the great
imitation OF the last few years.
False representations of values and earn
ing power, reckless diversion of credits OF
institutions TO promotions purposes and
secret pooling agreements TO assure the
! first market for the securities of insiders
under manipulation of paid market man
ayers are some of the incidents brought
within the range of charges. The result has
! been If
the whole class of shareholders i'm new in
dustrial securities and suspicion of motives
and methods in quarters which have beer
followed with unmiXed confidence. The
force of these considerations has been suf-
ficient to overcome any favorable factors
in the situation. The dread of money strin-
gency has definitely passed away and q
| growing activity in the market for mercan-
tile paper has followed. relieving any fears
of contraction of supplies for regular com
mercial purposes. Borrowers who have
fear of stringency find their precautions
unneeded and are reloaning. thus relaxing
the extra demand and leading To freer of
feringS by regular lenders. The progress
| of the crops has been favorable and freel
| movement OF grain has been reflected in the
| traffic reports OF the great railroads and II
! the supplies in the exchange market. Rail
road earnings show decisive increase In the
net return in spite OF the large increases in
| expenditures, largely due 10 higher wages
| according TO the showing I'm the annual re-
ports of n number of railroad presidents
| These factors have only availed partly Il
offset the feeling OF disapproval with which
the incidents in the promotion field are
viewed.