The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1904-03-20
WALL STREET TAKES
DECISION CALMLY.
End of Securities Case Relieves
the Tension
HOPEFUL VIEW is EVIDENT
Finaneiers Are Inclined to Look on
Decision of the Supreme Court
as saIutary for All Inter.
ests Concerned.
HOPEFUL VIEW is EVlOENT
BY w. q. NICHOLAS.


Securities case. Relief from the long pc
riod of tension was signalzed by sharp
recovery In the general list of stocks
traded in on the exchange. Whether this
recovery will hold remains TO be seen.
1t is the point upon which there is hon
| est difference of opinion.
| In pursuance of Its practice of jumping
at conclusions Wall street very frequent
! ~ makes mistakes. As a rule, however,
! 1t gets somewhere near the truth. In the
present case II has taken the stand that
| the government will be content with the
moral victory gained and will not soon
take the initiative against other COM
binations. The decision handed down by
the Supreme court is held to be a warn
| ing which must be observed, and here
after ambitious kings of finance must re-
| strict their operations within fixed legal
limits and must not attempt to overstep
| or cireumyent the laws. Now that the
| verdict is in there is a widespread dispo-
sition to concede the wisdom of the ad-
minstration in stepping In to check the
| development and growth Of tendency
toward combination in violation OF state
| and national laws
| 1t is discovered that the decision of the
court is only against illegal combina-
| lions in restraint of trade and does not
| affect in the slightesa degree legitimate
| enterprises. The holding company as
! such is not assailed. 1t Is the only when
| the holding company is employed to de-
| feat the law that 1t is held to be invalid,
| Wronfully used 1t is identically the same
position an individual might be VINO
might attempt to commit an unlawful or
| criminal act and can be proceeded against
| x.ri4A int of
! Successful prosecution becomes simply
matter of proof of violation of the law.
Death Blow Not Given.
| At first blush a great many people
| jumped to the conclusion that death
| blow had been given holding companies.
| Some little time has been required to cor
rect this error The holding company or
! ganized for proper purposes and conduct
| ed legitimately performs a very usetul
| office In the financial world. II Is spe-
cies of corporate trusteeship and has be-
| come an Invaluable part of the financial
machinery of the United States. There
| is not the remotest possibility of its dis
| placement or impairment. When, howev-
| err, those In control of holding companies
! attempt to use them for the purpose OF
organizing and carrying on combinations
| of railroads or industrials which can be
| proved to be in restraint of trade then
! thew do 1t at their own risk and become
! subject to discipline Their houses may
be pulled down over their heads.
There are many combinations which are
! In reality holding companies, but when
| do not carry that name. They nave pc
come holding companies In the incidental
| growth of business The Pennsylvania
| and New York Central railraod systems
partake of many of the features of hold
| ing companies and 1t is by no means GER
! tain that they are entirely free from the
| errors fallen into by J. ]. Hill and his as
| sociates in the northwest. The Pennsyl-
| vania has a controlling voice in the BAL
| timore and Ohio Chesapeake and Ohio
Norfolk and Western, Reading and other
narallel roads, while the New York Cen
| tral with its western connection the Lake
Shore, long ago took over competing
| line between Chicago and New York The
| Atlantic Coast Line might also come I'M
| der the ban by reason of its recent abb
sorbtion of the Louisville and Nashville.
| The Union Pacific In assuming the re-
sponsibility of buying control of Southern
| Pacific might also be within the danger
| line In the Industrial field the anthracite
coal trust and the Standard OIL company
are probably vulnerable but these no
more than before the handing down OF the
! decision on Monday last.
| .Other Lines Absorbed.
| without exception every important rail-
| road system in the country mas aDSorpeu
| minor lines. 1t SO happens that In great
| majority of instances. however these ac-
auisitions have been the way of legitimate
| development and extension. This Is con-
| spicuously the case with Pennsylvania
| Southern railway. Northwestern, 81 Paul,
| Illinois Central and Rock Island The last
| named possibly illustrates the idea OF the
! extension and rounding out OF system
| better than any of the others mentioned
| During the last two years It has grown
| from road having about 1000 miles OF
| track into a system embracing approx
mately $1,000 miles. Yet In all THIS ire
mendous development there has been no
parallelling Of road. This great system
which Is operated by holding company
| is therefore free and clear from attack,
| even though there should be a disposition
TO press the advantage gained by the
| government
The ITnited tSates Steel corporation Is
| a holding company and so Is Amalgamat-
| ed Copper. Southern railway and the
| Erie system are under the management
| of voting trusts-another form of holding
| company. The Reading railway with its
| alliances and combinations was conduct
| ed for many years by voting trust
which only recently dissolved.
Traders Bought Heavily.
Many of the shrewder traders on the
| exchange bought quite heavily during the
! past two weeks on the theory that even
| in the event of an adverse decision in the
| Northern Securities case the market
| would have a marked recovery. They held
| that the worst had been discounted and
| that II the necessity should arise the
| strong interests would support the market
and gave it a boost just TO show that
| property had some real value which Its
| owners were not afraid to stand for.
| The statement made by Attorney Cen
| eral Knox that the administration had no
| intention of running amuck was tonic
| to the stock market. 1t filled spectators
| and investors with more confidence than
| they had felt In months. The market
| was taken to mean that the kings or nm
| ance would take heed and cease their at
! tempts to carry combination to alarming
| lengths In fact these kings of finance
| were hardly In need of supreme court
| warning The course of the market dur
! ing the last eighteen months has chilled
| their ardor for expansion and aggrandize-
| ment Natural forces had given them the
| necessary check Declng prices had in
| many instances curtailed their powers
| and in others had been a notice which
| served the same purpose as storm Sig
nal does to ship captain. There ensued
/ a taking in Of sail and other preparations
| deemed essential for protection against
| storms.
! Continued Activity Predicted.
| Now, that the merger agony is Over
| there Is strong probability of n continued