The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1904-01-10
WAR ON TRUST COMP ANIES
THEIR OPERATIONS IN NEW YORK
MAY BE SOMEWHAT RESTRICTED.
Reports of Life Insurance Companies
af Unusual Interest This Year
steel Trusts Report.


are thrown around regular banking institutions
They have been active solicitors for deposits.
yet they are not obliged to carry cash reserves,
and many OF them allow their cash TO run down
to l. 2 and per cent. while State and national
banks carry % per cent reserve, and are under
rigid official surveillance.
There are about thirty OF these institutions
in the city Of New York and their aggregate
deposits nearly large as those OF the
banks within the jurisdiction OF the clearing
house The worst feature about many of the
trust companies has been their tendency to en-
gage in the promotion and underwriting of specu-
IatIve enterprises. This brought out in a
startling manner during the exposure Of the IN
EQUITIES OF the Shipbuilding trust
The abuse grew 50 fragrant that the bank ex-
aminer Of the state of New York has recon-
mended radical changes in the law, basing his
argument on ascertained facts going to prove
the unbuisnesslike methods employed by many
OF the existing concerns. 1t is evident that
there is going to be a hot fight this winter at
Albany over the proposed amendments to the
law as II now stands. Strong interests are ar
rayed on both sides and the legislative graft
ers are looking for a profitable season
Thus far only one two of the great life in
surance copanies have favored the newspapers
with their usual fuIl-page advertisements of
financial condition the last day OF the old
year. Those that have appeared are read with
more than ordinary interest. because of the
prevailing idea that the companies suffered
OF the shrinkage in the price of securities dur
ing 1905 In Of the reports which was given
or unsafe investments shown. as compared with
the report printed year ago. 1t was observed
however, that in OF apparent elimina-
tion the company left the asset in its list, but
A year ago the item was 80 100000 Of the
bonds OF the international Mercantile Marine
Company" This year the item appears under
syndicste The amount t'i is the same and the
bonds go down in the list having full par
The open market at 20. with not recorded bids
lately above 80. The reports Of the insurance
companies look much better as they now stand
than would have been the case II the reports
had been made the basis OF quotations pre-
the life insurance companies were an important
factor in the advance in the stock and bond
year.
One of the pIanl<s in the bull platform IN the
stock market is the great increase OF population
going on. This increase approaches 2.00e.-
600 a year. of which approximately 100000 is
due to immigration The natural growth of the
home population is least much more. This
splendid enlargement in the population OF the
Republic Is all 10 the good in a material way
more consumption OF products 1t means more
business for railroads. for manufacturers, for
storekeepers and for farmers,
The South and Southwest promise TO be the
The human tide setting strongly in that direc-
tion. TIE Atlantic States south Of New York
clear to the gulf are contributing In an Inn
and the places left vacant by domestic emigra-
ton are being. in a large measure filled by
yet felt only slightly the effects of material
from the old world.
The action Of the directors OF the United States
Steel Corporation in passing the dividend on the
common stock not unexpected. although IL
has cast a gloom upon the hearts OF forty odd
thousand stockholders of the junior securities
of the giant trust. The showing OF earnings for
the quarter ending Dec. 81 Of less than SIS, O0c,-
co., is ample justification for the action. how
ever. IL this statement is to be taken as a
basis for calculations on the net income OF the
Steel trust. which, during lean times, Will
rise above 10000 COO, amount barely sufficient
10 pay fixeo charges and provide for the sink
ing funds The exhibit Is in painful contrast
to that made year ago. showing net earnings
The apology is made that the statement for the
last quarter is about the worst that need be
guarantee goes with the apology. 1t is nevita-
bic that the conditions which confessed in
depressing effect upon holders OF industrial Sc
curities in general, although strong attempt
biggest of all corporations should not be ac-
cepted typical of tho smaller concerns. Steel
on account OF the voting power that goes with
the certificates. even though 1t should never pay
ers however, who put their money into the
stock at so a share and better and who have
seen their property depreciate day after day.
week after week and month after month.
The cotton market turned just In time 10 avert
the wholesale collapse laying DOWN of sew
eral strong chains OF bucket shops having Of
fees throughout the South. Middle West and
East. The strongest OF these bucket shop COM
binations are financed from Boston and New
York. They made many millions OF dollars In
stocks during 1908. but when public speculation
switched into cotton they paid back most OF
these profits and came within hairs breadth
When cotton passed lac a pound there was
among those who understood the bucket shop
o-point advance in the market Would PROBABLY
have been attended with disastrous results In
discriminate sharply between legitimate com
mission houses and bucket shops maSquerading
as such. In outward semblance they are iden-
teal. with the exception that In the case OF
bucket shops the rule is that better accommoda-
lions are provided for customers, and consequent
ly they get the bulk of the business.
/ Most OF the bucket shops are now controlled
by strong syndicates who have at their COM
mand large amounts OF capital They are equip
ped to withstand severe punishment and enormous
losses before laying down" feeling sure that
/ what they lose. and more too.
! one Boston outfit which is said to have cleaned
up nearly $40 0G9 in stocks last year. restored
/ To the speculative public at least so per cent OF
/ the amount In the form OF profits to players
/ in cotton As before stated. the turn in the
+ market just saved them from going on the
\ shoals. Just now the nimbe-witted element OF
\ bucket shop players seems 10 be taking up cot
/ fee in preference TO cotton. a bull movement in
/ this commodity has been under way for some
time and current opinion points 10 still higher
I prices.
Daniel J. Sully. who is reported 10 have made
several million dollars on the bull side OF cotton
during the last years. is reported to have
reversed his position. Gossip has IL that he
l has quietly organized bear pool and that hi
There Is positive veritcaton CT this story
/ but the street takes stock in IL. Mr.. Suly has
\ bought himself magnificent home IN the mil
/ llOnaire quarter. Of which Upper Fifth avenue is
\ the backbone. and will hereafter make New
/ York his nome. lie has bought seat on the
Stock Exchange.
The railroads that have been most liberal and
comprehensive in their expenditures for better
ments, improvements and equipment are hav
ing their periodical financial reports subjected
/ to unusually close scrutiny and analysis Vas
sums have been expended in this way and own
/ ers as well as the public are beginning TO Iool
| 10 the figures for a test OF the wisdom OF III,
expenditures
| Under Mr.. Harriman's administration OF tn,
I TTnion and Southern Pacific systems an amount