Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-11-18
Financial News [ etter
BY W. G. NICHOLAS.

NEW YORK, November 1.-THE wage
Garner Is usually the last to hear directly
of bull campaign In stocks. This bull
campaign began two years ago last spring
when the Standard OIL crowd, confident
that the depression in the steel industry
was over and that business in all lines
would pick up, began to load up with
stocks. They bought enormous quantities
Of Union Pacific from Is to 80. st. Paul
from 40 to $50, Steel common from 10 to
Is. Steel preferred from 60 to 20 and other
stocks at correspondingly low prices. They
conferred their campaign. however, on
Union Pacific, then a per cent stock.
When they began to buy stock they had
in front of its nose and could not under
stand why anybody should buy stocks
when things looked SO bad. Pessimists
were talking about hard times and dis
aster Now, after more than two years
of rising prices. with only occasional set
backs. the stocks that the Standard Oil
crowd loaded up with show enormous
profits. In the great increase in business
activity throughout the country the boom
in the steel business and the congestion
of railway traffic there is abundant reason
for the high prices for the present.
1t goes without saying that when the
otdHudTu I'll CEo"u IOducu up Wltn STOCKS
they looked forward to time when they
could sell them at a profit. The Wall
street phrase is that Stocks were made
to SELL" One railway company after the
other in the past two years has increased
its dividend or gone on dividend basis.
Increases In dividends usually follow the
great accumulation of stocks by insiders.
The third stage of the campaign Is now
being witnessed in the increase in wages
by the large interests. The movement for
the increase in wages seems to be a con-
certed one, and notably among the corpo-
rations which have increased wages or
have announced their intention of doing so,
are the Pennsylvania railroad, New York
Central railroad, Standard OIL Company,
U. s. Steel Corporation and the Union Pa
cific railroad. These are five of the largest
and most powerful corpora tons in the
country, and the Standard Oil interest Is
dominant In all of them with the excep-
ton Of the Pennsylvania. The Penusyl-
vana directors frankly say that they are
increasing wages because of the increased
cost of living and the prosperity Of the
country OF course, the prosperity Of the
country Is the real reason, because no
corporation would increase its wages no
matter how high the cost Of living might
be unless 1t was earning the surplus de-
manded for the increase in wages. Pros
porous corporations all over the country
will now either be obliged to raise their
wages or have strikes on their hands. It
is likely that any threatened strikes IN
by wise directors, because business is too
active now for a corporation to lose any
time in a strike. The wholesale raising
of wages all over the country by large
corporations usually marks the culmina-
ton of a prosperity wave, but 1t is unwise
to rely absolutely on precedents in finance
Some Of the enthusiasts of today would
have us believe that another precedent is
to be broken now and that the country is
going to make still higher records before it
reaches the elimination Of this boom.
-
This bull campaign. thus far, looking at
1t from broad point Of view. has been
failure for the makers of securities. We
have had an enormous rise In securities in
the last two years with no commensurate
public distribution. This is especially true
in bonds The bond sRarket has been fat
for long time and bond houses have been
unable to get rid of their securities at any
reasonable profit. The big interests have
most of the stocks that they purchased
during the rise and they have been unable
to find any large public market for them.
Various reasons are assigned for this but
an unprejudiced view of the matter leads
one to the conclusion that the reason the
big people cannot sell stocks to the public
at these prices is that the public's faith
In high finance has been very much shaken
by the exposures of the past three or four
years, especially those of the past two
years Tom Lawson Of Boston is regarded
in Wall street as a charlatan and a fakir
He squealed some of his pals because
they did not divide up with him the way he
thought they ought to. but, at the same
time. Lawson's attacks on the Standard
Oil crowd and on Wall street methods In
general have had much to do with opening
peoples eyes to some things that they
ought to know. and to shake their conf
dence in Wall street methods. The New
York insurance investigation also hurt the
big interests. More investors have come
IN orf thak CO.
to sell than ever before. They have not
yet recovered from the shock they had in
the slump in the Steel securities three.
years ago. This Ia one reason why money