The San Juan islander. [volume] (Friday Harbor, Wash.) 1898-1914, 1903-12-03
Revelations In High Finance.

Revelations In High Finance.
Public attention has lately been cen
tered upon two events of unusual i'm
portancc in the financial world. THESE
sre the reduction OF the dividend o
the United states Steel corporation:
common stock from / to one-half of
per cent for the current quarter and tn,
revelations concerning the organization
End financing of the United State;
Shipbui,ding company. While separate
tnd distinct propositions. they are more
or less associated in the public mine
by reason of the identity of some Of
the men prominently mentioned in
connection with both concerns
The reduction of the dividend of the
Steel corporation is announced to %
due to the fact that the earnings of the
company have fallen off $l.Gi2,G6S fol
the third quarter of this year as com
pared with the sane quarter of 1902
and some thirty odd thousand stock
holders are affected by it. The action
of the company is generally regarded
by the financial press as wise and con
sentative" Dun's review declaring that
"the wisdom OF the directors in follow
ing so conservative a course will be
generally approved" Bradstreets also
describes the act as conservative and
adds that unless conditions improve
there is no assurance that even the
dividend rate of one-half of per cent
can be maintained with propriety and
safety" Whether wise or otherwise
it seems apparent that wisdom came
very late to the directors of the great
est corporation in the world. The pro-
motors and underwriters OF the most
gigantic concern that this era of indus
trial and financial combination has pro
duced are at least fairly exposed to the
charge of having put the common
stock On per cent dividend basis
for the essential purpose of helping
them marhet the securities. On this
point the New York Evening Post says:
If dividends otherwise inadvsable. may
rightly pe paid to induce investors TO give
up their money. then the practices Of the
Fisks ana Goulds a generation since
have powerful defense. Indeed the Con
soidated Lake Superior concern might
quite as readily plead that it had to pay
last year S I per cent dividends, though
on the verge of financial disaster because
on no oEher basis could the stock be
distributed" In the Lake Superior case
the police meant bankruptcy; in the Steel
corporations case ii. of course. means
principle IS asserted in the one instance
as in the other.
In the realm of high finance there
may be nothing in all this that is ques-
tionable, nothing at least that is in
dictable The ssipbuilding case. how
ever, presents much more serious as
poets, as in this there are exhibited in
plain sight the very worst and most
shameful phases of the trust booming
craze 1t is not to be wondered that
there il slump in the stock market
after people who are expected to lin
vest in securities" see how these ''se-
curities" are manufactured and read
how irresponsible and ignorant dun
my" directors are employed for $50 to
manipulate properties valued at $70,-
100000; when they hear how our
leading financial lights pay $30,000,-
GO for $7,000,000 plants. and how the
''yenoers' arrange to unload the shares
mus obtained upon the unsuspecting
lublic before the character of the
Ceal Is found out. The revelations
of the investigation of the shipbuild-
ing trust organization in New York,
coming on top of the recent dis
Cussions regarding overcapitalization,
shrinking of earnings, reduction and
passing of dividends, ETC., are we'll cal
culated not only to weaken the stock
market, but to upset confidence in the
methods of some of our best known
capitalists and fnanciers, methods
which in the commoner and less gigan-
lie affairs of business might not who'll
j. escape the cognizance of grand
.-!ries.
Governor William II. Hunt of Porto