New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-10-18
Financial.
The financial World.


they we're az the close yesterday; a very fs~
were Yesterday higher. and some were Io1s-.
but for the majority there was not r,ucs
change With the fndustrials IL was dirsra,.
There uniform losses are recorded and va,
considerable ones in some cases. During the
month there have been sharp fluctuations ana
the whole list has gone down But the rscor5
shows that the railroad stocks have raIIy.az
power. while the bulk Of the iadustrias ara
almost without H.
II was. however. an Industrial ard one n
had repute also. viz. Anal gauated Cooos-
which started the rally which the market hss
enioved since wednesday. The full quarterly
dividend being the mighty sum OF 4 OF
per cent. was declared by the directors when
by the previous action OF the stock IN drop
ming several points. il hal been very generzIfy
assumed that the dividend would De passed
TO reduce II. say to x or Il. as bordering
slightly on the ridiculous. was not seriously
considered Copper being regarded a stan
dard OH stock the declaration % the dlgi-
dend was taken as meaning some change e
attitude on the part OF that faction toward the
stock market II required. however % be sl1o-
plemented next day by the declaration % ar
initial dividend on Reading second preferred.
to really start the traders 70 a covering move
nneot This when once well started gathered
considerable force. The bank statement yes
terday rather helped II: and the market closed
the day and the week with a substantial al
vance from previous low prices. with Copper
leading in the industrial LIST. and Atchisol
the railroads
II "a proof OF how completely Reading ars.
and second preferred have disappeared from
the trading that a transaction In the first Is
now rarely seen. and in the second single
100 shares were done on the day Wnen tns STOCK
cot its first dividend. The cOrrron stock sun
continues one Of the most active on the Isl.
but the other issues have gone INTO tne tfeas-
urfes OF the B. & o. and Lake Shore companies
that is, been divided up between the Pennsy-
vania and Lake Shore interests
A contributing cause 20 the better tone o. ina
market is the easier state Of money. The banks
are now willing to lend. on good collateral over
the end Of the year. at IA per cent. ard even
4 na- cent loans are spoken Of. This IS good
80 far as It goes; but must not be counted on
over much. Commercial paper IS SIN Per
cent or above: and a general activity Z tns
stock market with rising prices would soon
put money back TO per cent again, even on tas
best collateral The banks are not yet IN shape
70 support a bull movement with crop moving
demands still ahead Of them This IS whar
makes conservative bankers desire 20 see tia
market remain comparatively quiet FOR a Wn-ls-
Rallies on the shorts. when there has been over
selling. don't count They are quick. but don't
last long Mr.. Keene has the credit OF again
being aggressive in the market, and o. doing
considerable 10 help the present rally. He IS
talking strongly bulIish.
Beyond doubt the most depressing force on
the market has been the fail IN the Steel STOCKS.
which have struck sIedge hammer blows when
ever they dropped Let it be considered that
there are 10000 stockholders in this colossal
CORPORATION, and imagine the depressing s1sc-
on speculation. on public opinion as affecting
speculation, when these seventy thousand peo-
pie are watching their holdings drop. drop in
the market and still go on dropping Every
individual Of the whole number Influences mora
or less the circle in which he or she-and tia
number Of women stockholders is very large
moves. whether il be big or little. You are.
consequently. dealing with an important BODY
Of opinion focused on the securities OF a single
great corpora tioni and hence II IS rOr % BE-
wondered at that the Steel stocks so strongly
influence the market.
Since the reduction OF the dividend OF ira
common stock. discussion has become more keen
on the outlook for the corporation. and the cor
ditiOns Of its business. An argument urged win
some force on the bear side is thar the proper
ton of profits on the total output OF the cor
poratiOn, as shown in it's annual report IS ao-
normally large. only possible in exceptionally
prosperous times. and greatly beyond the aver
age ratio Of profits in the manufacturing ousi-
ness. The figures are taken from the report
In round numbers. gross sales and earnings
footed I'D for the year. $50 millions: on which
there was a profit OF $50 millions; conseQuentiy-
the actual cost Of the goods turned out being 40
millions. the ratio Of profit on this sum was a
little over 81 per cent. This. il is argued. is a
rate which is far beyond the average in ths
manufacturing industry and impossible OF main
tenance It is further urged. that a gross OUT
nut Of $50 millions is cOnsidera bly, below what
it should be as compared with the capitaIizaaon;
since it is the same as manufacturer WIKI
saw 100000 capital. turning out only aocG
SSS 900 worth Of goods. whereas he should have
an output of amount at least equal TO IS
capital; and in most cases X IS necessary vnera
{ staple article is manufactured, 70 have an ou'-
put of twice or three times the capital N oFGef
to earn good interest on T.
The argument is stated here as one that has
been. and is being urged: but :, is not intended.
by stating il. TO endorse it. There Is roora 1or
considerable discussion. II the argument is cor
rect. it is well to have the facts known II IL -
not il is desirable 70 correct the error. As
fact IL appears open to a fundamental OojecSSon'
II the Steel Corporation cannot make net OF
81 per cent on its output. IL must be because -
business is less profitable than that OF railroad
company. which il certainly has not hitherto
been supposed to be \ first class rallroa4 -
these days has working expenses from % 70 o.
per cent. net earnings being 33 10 10 per cenI
This net is the profit It makes on the article 4
sells. viz. transportation Now Transporting.
| is certainly as staple article as steel, and
a railroad can make SO TO 40 per cent pront On
the staple article II sells. why cannot the stee'
| company make the same what ia sells A9
/ parently. only on the theory stated. that III
/ transportation business is much more Proftaos