The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1904-03-27
U. S. STEEL EARNINGS;
EFFECT ON ITS STOCK

Commenting upon the condition of the United
States Steel Corporation ana things shown by its
recent published report the New York Times
says:
Nothing could clearly demonstrate the
fact that the company heavily overcapital-
lied than the course of the stock quotation as
compared with the earnings OF the company. The
course of the stock from the very first was
downward. or course there were fluctuations,
but the general trend to lower level. IL
the stock had approximately represented the
earnings in the second year of the company's ex-
istence should have carried the price OF the
Still more remarsabe deanctioU - rs he
found in the fact that whatever influence the
of the stock in advance of the earnings. The
earnings. ii must be remembered, made
public every month, but only every quarter. The
only people who know what the earnings are
each month are the insiders. But not only do
ahead of the public, they also have means to in
form themselves to what the earnings dur
Ing Ing the coming quarter will probably be- as they
on hand. In other words the &C ming events in the
way Of earnings did cast their shadows before
In the course OF the stock market. The only ex-
PLANTATION is that some of the insiders took lib
eral advantage OF their advance knowledge to
speculate in the market This speculation must
have been mostly on the selling side. otherwise
the general course of the stock could not have
been downward.
&c. for instance, II appears that although the
earnings declined from October, 1901. to January
1902, usual during the winter season the stock
began to rise during the winter in anticipation
of the big rise of the spring 1902 which cul-
minated in the boom OF the summer OF that year
But while the earnings kept up steadily ali
through the seven months ending October of that
year the stock began to decline gradually fore
telling decline. In December, 1902, and in jan
uary, 1903, the stock rose, anticipating an i'm
provement in earnings. but in April, 1903, the
stock sold off again II had evidently become an
parent that the remarkable performance OF the
summer of 1902 could not be REPEATED and the
conviction was growing among the insiders that
the fall would see serious drop In earnings.
In explaining the rapid rise IN earnings shown
by the chart for the months OF September 10
October 1901, IL should be said that this was
due to the settlement of the big strike OF the
Amalgamated Association OF Steel Workers.
which had broken out the previous July. The
only period in the history OF the company whe3
the earnings remained steadily at a high level
occurred In the boom times OF 1902 when for
seven months. they fuctuated within $1,000. 900
of the high mark During the drop OF the first
winter the decline OF earnings had no very
marked effect on the market, and during the Sec
ond winter the effect was compare lively slight
due TO the knowledge that the summer months
would bring an Improvement Remembering
then, that the price OF the stock has for short
periods indicated the course which the earnings
would take later, II may be not going too far to
expect slight Improvement over present condi-
tons In the steel trade. provided the rise in the
price of the shares should not give way at once
to a decline. -