The Washington herald., 1906-10-13


ways regarded industrials with certain
amount Of prejudice as compared with
railroads, on account Of the greater ease
with which they could be duplicated in
ease their profits became so large as TO
excite thoroughly aggressive competition
The reason why United States Steel Is
no longer classed with the other industrial
issues is that the company is not now
open TO new competition on an important
scale, having corraIled the ore supplies
which would have made 1t possible for
any outside interest to compete on equal
terms. Nc great steel making concern
could be built up without the possession
of ample supplies OF ore. and while there
are considerable tracts of ore land in pri-
vate hands, the percentage Of iron IN these
runs so low that the relative cost OF eX-
traction would prove a very serious hand
licap. But even eliminating this cOnsidera-
tion It would be practically impossible for
any new interest TO obtain. except BY
combining the resources of existing steel
concerns. an amount of ore at all COM
parable 10 that possessed by the Steel
corporation. With a company seeking TO
build 2 railroad II would, after all. be
only "a question of getting money enough
to buy terminal and other property but
in the steel business there is a natural
! limitation, and no amount OF money
could avail TO take more iron cut Of the
/ earth than nature has put there The
f0Ice of this factor viii increase with the
tine, according TO one OF natures laws, as
the suJare Of the distance.
At 50 there was a good deal Of Steel
! for sale yesterday. as might have been
expected in view of the fact that at the
/ present level the stock is selling higher
! than at any time since 1901, giving an op-
portunity to people who have held on for
/ years to get out with profit or compar-
atively light loss Large traders who
bought on the announcement Of the ore
deal seem also 10 be engaged in realizing
and altogether the 50 mark is a good
place for a halt to take breath If the
stock is really about to make the jour
ney-as many good judges OF value be-
Heve-tG par or something near il. The
statement TO be presented to the direct
OTS at their meeting on the last Tuesday
of the month will undoubtedly make an
/ excellent showing, but whether or not it
VIII be made the base for an increase
Of dividend is another question. II is
I certain that the corporation is doing ve.y
we'll indeed but in view OF the heavy
expenditures on account of new cOnstruc-
tiOn IL is quite possible that for some
time stockholders interests can best be
served by holding the dividend rate down
TO q very low basis.
Advantages arising from the purchase
Of the Hill ores and not expectations of
an increase in the dividend have fur
nished the basis for the most important
buying Of Steel common in the past week
or so but several traders in endeavoring
TO discover the cause Of the rise I'm the
stock have reached a false conclusion
and would therefore probably throw over
their holdings if assured of error in their
[ hypothesis. For this reason the dividend
action may cause a temporary setback
IN the stock resulting in increased action
by large interests. Some rather ingeui-
Gus theories have been propounded 10
account for the relative heaviness Of the
preferred because the true explanation
. is so simple that the traders must have
something more romantic. but the fact
remains that the preferred stock Is de-
pressed by sales coming from interests
which BUY 210 shares OF the common with
the proceeds Of lG1 shares Of the pre-
1e-red. This switching from the one
stock IN the other represents belief that
within the next six months or so the ad-
vance m The common viii be relatively
much greater than that in the preferred.
as the latter being limited in its dividend
possibilities can hardly advance above
l20 at the utmost under prevailing none
tary conditions.
IngersoII-Rand Drill. which was
traded in for the first time,
scored an advance of five points
over its last sale on the curb. The
stock IS firmly held, being to a. large ex-
tent in the hands of the Grace family.
as William r. Grace established the com
pany on a solid basis Earnings of the
company are at present running at a rate
OF 10 per cent, and the company Is in 4
strong position in respect to business on
land, efficiency of plant, and working
capital.
Bull tips on Northern Pacific. Reading
and Southern Pacific We're circulated at
She opening, the first named being highly
regarded. But traders who watched the
result became suspicious that Southern
Pacific was sold on the strength Of the
others. though selling did not proceed
from influential sources.
RumOr supplied one reason for the rise
. in Northern Pacific and incontrovertibIe
iact another. The latter was in the show
-ng of 1A51 per cent earned on the stock.
IS against 1915 Per cent earned on Great
Northern. There are. of course. other
! considerations that the record Of earnings
to establish a difference in value of the
took, the principal item accounting for
he higher power of Great Northern be
-ng the latter's much larger interest in
the ore deal just cOnsummated with the
United States Steel Corporation. 1t is a
connection with this phase Of the differ
,ncc between the two companies that ru-
NOR has become busy. asserting that the
sale of the Northern Pacific ores will re
suit in the distribution OF a scrip divi-
!enG of 80 1-3 per cent 20 stockholders
of that company 1t must. however. be
evident that il such is the case a much
-Cnger distribution viii be made 10 hold
ers OF Great Northern, and therefore the
{ comparative heavineSs of the latter does
not coincide very well with the report
concerning the other property. No doubt
/ q substantial distribution will be made in
time. but it is seriously questioned if one
S now imminent
The directors Of the General Electric
Company have called n special meeting
Of stockholders % be held November 90
tn act upon the question of increasing the
authCi ized capital from S600C0.GO0 TO $780,
000.0o0 1t is announced that the new
stocks viii Trobably be offered to stock
holders in ratio of one new share for
every five shares held. which would call
for 4 little under Sll,00O,00O
The fact that st. Paul's recent issue of
S55.o00,000 new stock. according to the com
pany's application for listing on the ex-
change. was not for the purpose OF a Pa