The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1905-08-13
WHY HIGH CLASS
STOCKS DISAPPEAR
The Strong Securities go Into
Investors Boxes
SOME OF The FAVoRlTES
Notes and Gossip of Wall street-6uII
Movement Making Headway-Low
Price Stocks Are Coming
In for Attention.
BY w. c. NICHOLAS.

BY w. G. NICHOLAS.
New York. August 12-In the evolution
of the market number of high-class
stocks are disappearing from the street
and going into the strong boxes Of inves-
tors preforce bringing into increasing
speculative prominence the list of low
priced securities.
On the retired list or in process of re-
tirement are quite number of stocks
which have for years been the recognized
market leaders and popular favorites.
Among the so-called "fancies' which
have been swept into the list may be
enumerated Northwestern, Delaware,
Lackawana and Western. Northern Pa
cific, Great Northern Omaha, New York,
New Haven and Hartford, Lake Shore
and Delaware and Hudson. Working into
the same class are st. Paul. Illinois Cen
trail Louisville and Nashville, New York
Central Union Pacific, Canadian Pacific
and Pennsylvania. Several industrials are
also In the swim and tending in the same
direction, namely, the senior tobacco IS
sues, sugar, smelling, steel preferred and
the two great electric companies General
and Westinghouse.
Union Pacific, Pennsylvania and the
Vanderbilts will no doubt be kept active
for a long time on account of the neces-
sty constantly arising for the manufac-
ture and sale of new securities for I'M
provement, extension, equipment and bet
terment These three systems last named
together with Rock Island and the Could
systems, will for many years TO come
call for the mobilization of immense cap
ital and they will therefore be continu-
Ill offerings
goods 1t must not be understood from
the foregoing that the market for IAN
cies'' and for investment securities VIII
become dead, for such is not the case
There must always be market place at
which these securities can be bought and
sold and the New York stock exchange
will ever be the place In which buyers
| and sellers must meet to establish quota
| lions for their properties. There Is con-
| tinually going on a shifting OF invest
ments Incident to the restlessness OF
| umanity. Holders of Inherited wealth.,
| firing of inactivity, will always be Of
| fering low interest bearing highgrade in
| vestment securities in order to obtain
cash with which to embark In live en-
| terprises and take speculative chances.
| On the other hand possessors of new
| wealth. weary of the struggle, Will be
| found ready and willing to take these
| high grade securities in order to obtain
repose Of soul and insurance against the
1 harsh vicissitudes Of fortune. This is a
| condition which will KEEP the market alive,
although the speculative element may be
almost entirely eliminated.
| 1t thus occurs that the commission
earners and professional spectators find
| stocks In order to get action for their
stocks in order to getection for their
| money and to secure the necessary lati-
tude of play. ''harbor ROOM" as 1t Is
1 nlraro md Ia
sion houses have no stomach for specu-
lation in hlgh-priced stocks. They can
not consistently discourage trading In
| the standard stocks (Which rule all the
way from 100 to 1900 because they can
not see anything against the merit or
virtue of the properties, but they are
doing all they can to turn the attention
| of their clients into junior securities.
| The best they can ask from their GUS
toners is 20 per cent margin on such
stocks as st. Paul, Delaware and Hud-
son, General Electric, Westinghouse,
Northern Pacific Great Northern and
Omaha Purchases of this class of stock
| entails the employment of immense capi-
| tai on the part of the broker COM
mission merchant. 1t Is therefore de-
| cidedly to the interest of the middle men
| to divert the public from high priced
into low-priced issues. All of which ac-
counts for the energetic Wall-street prop
uganda now going on In favor OF the
| gamble in the juniors. A customer with
| $40, 900 can buy 1000 shares of Rock Island
| common, Erie common. Southern Rail-
way, Steel common. Alton, Wisconsin
| Central, and q dozen other stocks Of the
| same class where he can buy 200 shares
of gilt-edged stuff The 1000-s shares trade
gives the player quicker action for his
money than the 200-share trade and pays
better commissions.
| The market literature of the street is
| loud sounding in praise of low-priced
| stocks and chock full of reasons and
philosophy why the gambling money
should be attacked up on that part OF
the layout And in all fairness It must
| be confessed that there is logic and truth
in much that is being said for the pro-
motion of speculative Investment In low
priced securities. For the most part.
these Issues represented at the outset
good will" only. They were handed out
as bonuses and the dealers attached
small value to the goods. The country
has grown rich with such extraordinary
rapidity, however. and the tide of ma
tonal prosperity has been SO overwhelm-
ing that the good will Of two. three and
five years ago has been converted into
thing of tangible value.
Everybody who has bet on the growth
of the country has been a winner. At
current prices buyers Of railroad and
Industrial stocks would be able to sell,
II so inclined at almost record prices.
Some things were higher two years and
half ago than they are now, but the
general average Is very nearly the mark
made at the flood tide of speculation In
1902 Not only that, but the wealth of
the country Is greater than then. The
increase in the quantity of securities is
only slightly larger and the properties
everywhere are yielding very much bet
ter gross and net returns on capital in
vested.
The situation may therefore be proper
~ described as bullish. There is every
reason to believe that the crops, with
the exception of cotton, will be far above
the average and that there will be an
other huge addition to our solid wealth
this year of our Lord. 1905 On top of that
we are In the midst of a period Of as
founding gold and currency inf1ation-the
greatest the world has ever seen. This
imitation intimately effects every COM
mercial nations of the world. Its influ-
ence is universal and the tendency is to
the Inevitable uplifting of prices. There
may be. and In fact there will be, more
or less violent fluctuations as the tide
rises. but the rise goes on Just the same,
and the high water marks of days, weeks
and months will be successfully sub
merged and give place to new records
This process has been going on for the
past five or six years and with the In
creasing production of gold the world over
the movement is gaining in force and IN
tensity What the end will be is at pres
ent question which chiefly interests