Los Angeles herald., 1906-07-28
SLUMP OCCURS IN
ASSOCIATED OIL
SMALL HOLDERS OF STOCK
BECOME NERVOUS
Many Reasons Are Assigned for the
Decline In Price and Manipu-
latlon From the "lnslde"
Is Suggested

Small holders of Associated Oil stock
are beginning to show considerable ner-
vousness on account of the action of
the market for that stock.
Notwithstanding the verlhcation of
the report that the company had Sc
cured a share of a valuable contract in
Japan, quotations on the stock ex-
change continue to display a tendency
to seek lower level. Sales were made
yesterday at 81 IA regular and at 3S ga
"seller 30," that is, for stock deliver
able in thirty days at the option of
the seller.
A few weeks ago, when rumors were
first circulated that the company was
after big Japanese contract, the
stock sold up to 81, but after reaching
that point the market turned and the
shares have been on the toboggan ever
since. Until recently no great amount
of stock has come out but the demand
has been light and 1t has required only
a moderate pressure to work the mar
ket down. Since quotations have gone
below 40 the pressure to sell has in
creased and the question that is wor-
rying traders is as to whether this
stock is coming from the ''inside" or
merely represents the aggregate offer
Uncertainty as to Dividend
The explanation given on the ex
change for the recent weakness of the
stock is uncertainty as to the next div
idend. The company has been paying
at the rate of 11a per cent semi-annual-
ly and the directors are expected to
meet in San Francisco next week for
the purpose of taking action on the
dividend for the last half year.
For the last few days there have been
rumors afloat that this dividend will
be passed, but anything in the way of
official confirmation of this story has
been absolutely lacking. Judging by
the amount of stock that is coming on
the market, however, 1t is evident that
the report has been causing a good
deal of uneasiness among the local
traders.
Among the theories advanced is one
that the Associated company has been
compelled TO carry large number of
it's northern customers by reason of the
recent San Francisco fire, and that in
consequence it's available funds have
been heavily drawn upon. The ac-
counts which the company is supposed
to have been compelled to carry are
generally conceded to be good, and fig
ure on its books as bills receivable, but
l0e dSSulIlpIlOH Is llldl
time must elapse before they can be
collected
Cheap Oil Is Scarce
Another story that has gained some
credence is that the company is ex-
perlencing considerable difficulty in Sc
curing supplies of oil with which to
| fill it's large contracts at a price which
will insure it a profit.
Tim Spellacy, one of the large inde-
pendent producers in the Bakersfield
district, stated while In Los Angeles
short time ago that several of the in
dependent wells had been closed down
because of the unsatisfactory price
which the owners were able to obtain
from the Associated, and that they
would not be reopened until the trust
showed disposition to pay a fair price
for the product He said the inde-
pendents were well aware of the fact
that the Associated had several large
contracts on it's hands, and they count
ed on the company being compelled
eventually to make terms with the out
siders.
Friends of the stock say they believe
the 'insiders" are merely manipulating
the market for the purpose of buying
up a large amount of stock at low
prices Offerings on the exchange, how
ever, continue heavy. A block of 10000
shares was offered yesterday at 371s,
which was only a small fraction above
the lowest selling price. The closing
offer was 37%. Actual transactions in
the stock were small and the buying
power was exceedingly limited.