The Birmingham age-herald., 1907-05-19
WALL STREET TAXES
 FLING AT GRAIN More Money Was Lost Than Won, However CENSOR FINANCIAL ADS Big New York Paper Will In the Fu- ture Be Careful About Financial Advertislne-eossIp of the
 Street.
BY w. c. NICHOLAS.

bull market, just like this one, started
 with wheat at the 80 cent level. The price
 had been holding around that level for
 months and there was little doing in
 the market. Then some of the grain
 houses began to get line on the crop
 through their crop reporters and started l quietly accommodating wheat. The price
 was advanced to 90 cents without attract
 ing much public interest. The same
 stories went around then as have gone
 around this spring tending to discredit
 the crop reporters who were called crop
 killers. Then the stories or damage to ] the crop began to become public property and were spread out in the newspapers. | When wheat reached 95 cents the public Itbegan to come in strong, and the farm CTS themselves got bulish. There was
 a violent advance In the market as soon
 as this public buying came in. Some of l the wheat operators, who had begun { their bull campaign at 80 cents tried to | put brakes on before wheat reached S1. They sold an immense line of wheat but the public absorbed it all, and took the | market into its own hands. There was | nothing else for the wise ones to do but | follow the crowd and wheat went on up | 70 cents more
 Big money has been made in grain l speculation by Wall street operators, but true balance sheet would show more money lost than made. Wall street | usually gets into the grain market at
 the eleventh hour. boosts prices by sheer | physical strength, and then finds itself l hung up high and dry when an attempt 1 Is made to convert paper profits into cash. | It's the easiest thing in the world to put | the grain market up by buying wheat
 day after day in million bushel lots, but 4a1fa
 ket for big line of long wheat after | the fever has left the public Some years | ago James R. Keene made big play in the Chicago market and put prices up in | the Wall street fashion. He accumulated l many millions of bushels of wheat, but
 when he tried to sell it prices tumbled
 away in a startling manner It is related
 that Mr. Keene was two years getting rid
 of the real grain that he had to take on | his contracts, and that the last lot he
 sold was a cargo for Cadiz. MT. Keene's
 friends used to say that the "Old Man" | had scouts out all over the world looking
 for people who wanted to buy wheat
 John w. Gates was plunged more or less l in wheat and has also taken some big losses. MT. Gates came in on the tail end
 of the 19O4-1sO5 bull market in wheat. and made up pool to put the price to $1 30.
 The early bird, who began pulling the
 market around 80 cents, had taken all the
 rich piekings, and were well out of the
 market when the Gates pool took hold
 at about 30 cents higher. After MT. Gates
 and his friends had loaded up with some l 100000 or 2O,OOO,00o bushels. it is report
 ed that MT. Gates went to MT. Keene to ask him to join the pool. The veteran operator asked MT. Gates how much wheat he was carrying. When the figure was named Mir. Keene only remarked,
 Well, I'm sorry for you, Gates; l don't a fn ba Gates pool boosted prices for a while
 but couldn't find anybody to sell out on, and then wisely decided to dump the whole line In the market at any old price. It was gossiped that the Gates pool took a big loss, but it's loss wasn't to be com pared with the combined losses taken by the followers of the pool.
 The effect of short crops on railroad tonnage Is thus analysed by an expert:
 Wall street is usually slow to credit early warnings of crop disasters. It refers to reports from the Green Bug area as trash and laughs them away as long as it is possible to do so But
 when at last the truth dawns upon the Stock Exchange, 1t is made the foundation of attacks on values out of all propor- ton to the damage which Is likely to result. Thus we are told in one days gossip from New York that the crop |, we are assured that the Santa Fe has to reduce it's common stock dividend in | consequence of losing so much freight Neither story will stand analysis. The : best approximation we have of the traf- , fife resulting from ten of our chief crops makes the total about 14,000,00O carloads annually. This estimate takes into &C., count the division of haul among all the carriers and as 1t has the highest rail- way authority, we may accept it as near enough correct to serve all purposes
 From thi traffic the roads derive a reve- nue of about $525. 100000 a year. The freight on wheat amount to $6s0OO. 900; in oats to s45, 900; and on corn to $227, GOO, ,000 That Is to say, the three major crops contribute to the carriers about two-thirds of the total revenue from the ten principal farm products"
 The loss to railroad revenue from a 100000,00O shortage is computed by this authority in this wise: "A crop of wheat like that of 1906 makes about 5500O0 car loads to be hauled to the markets; and the part of the oats crop available for shipment amounts to about 445,000 car
 loads-say 100000 carloads of both, yield
 ing approximately s120 a car to the rail-
 ways. From the best available data we have estimated the probable deficiency of wheat in the winter belt at 1O8,0O0 900
 bushels and the loss in the oats crop
 may amount to 240,0O0000 bushels. As-
 suming these estimates to be correct, 1t l appears that the loss of tonnage to the | railways might easily reach 14S000 car loads of wheat and 10000 carloads of
 oats. In dollars this loss would approx 1 innate S31, 900 in gross earnings or $455 | a mile of track in the states included l in the figures. When 1t is considered that l $455 a mile is more than a quarter of l the average net earnings per mile of i the railways of the whole country, the magnitude of the possible loss becomes | very clear We must add that so large
 a reduction in tonnage implies consid- erable saving in train and engine mlle- | age, fuel, labor, wear and tear, and | agency expense, so that the net loss | might not exceed $150 a mile on the | basis of our computation. But even that
 would mean a total of SIG. 600, or about | one-twentieth of the total amount paid in dividends by all the roads of gthe | country in 1905'
 The most interesting feature of the | Union Pacific underwriting is that the l unerwriting syndicate makes a very frank
 statement of the details Of It's contract | with the railroad company. The letter sent out by Kuhn, Loeb & Co., inviting
 bankers to join in the s75,0O0,0O0 syndicate
 state that an arrangement has been made
 with the railroad company whereby the
 syndicate will receive a commission of 2 per cent of the par value of the bonds. and the managers will receive a bankers | commission of another lz per cent. And l saap that fhis railroad apifa