Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-02-17
Financial News Letter
BY W. G. NICHOLAS.

BY W. G. NICHOLAS.
NEW YORK, February 16--The marking
up of Anaconda Copper to 300 is Wall
streets way of advertising the copper boom.
Boston Is really the home of copper stocks.
and very large part of the capital that
goes every year into copper mining comes
out of New England. We had boom in
copper stocks at the time of the flotation
of the Amalgamated Copper Company, but
the metal was very much cheaper then
than now and the demand for it was not
nearly so great. The Standard Oil capt.
talistS went into the American copper bust
ness with the idea of controlling it. They
made failure and the copper metal mar
they have learned more about copper min
ing and they have placed the Amalgamated
in a very much stronger position. The
natural conditions are now very much bet
ter for boom in copper stocks than eight
years ago.
4 u
In peering into the future of the copper
market 1t is well to remember that little
while ago you could buy eight pounds for
a dollar; now the dollar will buy only four
pounds and the enthusiasts tell us that
dollar may buy only three two and one
half pounds of copper Just to show rough
~ how copper mining profits increase with
higher prices for the metal here is a little
Illustration: If a $25,O0O.OOO copper COM
pany produces 5O,0O0,OO0 pounds of copper
at cost of II cents a pound and sells it at
10 cents its net is $1,sO0, 900, or per cent
on the capital. With 25-cent copper its
net is $6500,O0O, or 26 per cent, and with
or SO per cent But the copper enthusiasts
who are predicting sky prices for the metal
will find food for thought in the annual
report of the Western Electric Company,
hoo
ing the past ten years of amazing pros
perity. Its gross business in 1896 was
$S,OOO,O00. For 1906 1t was nearly $4,000,
600. Last years big figure was an increase
company at the end of the year employed
1000 men; the high-water mark was in
August, when there were %, 600 on the pay
roll: Here in Wall street the average spec
ulator wants to know what the Western
Electric Company is. The only companies
he ever hears about are the Westinghouse
and General Electric. The big eastern COM
pany is the General Electric, but its gross
business last year was only 100000 600 and
its payroll only carries $4,000 names. So it
is seen that the Western Electric is a fairly
big affair, even though the Wall street spec
ulator does not know much about it. In
the annual report, which gives the astound-
ing figures of the company's business, ap-
pears this Illuminating sentence: Business
is falling off and the outlook is for reduced
earnings owing to customers planning less
construction on account of high prices of
materials"
The copper enthusiasts predict that the
metal is going higher. There must be
limit to price If the consumers Of copper
are expected to continue to sell their manu-
featured product at profit. The direc-
tors of the Western Electric already find
that their business is falling off because
their customers who have been so lavish in
their orders the mast two balk
buying machinery on the basis Of 25-cent
copper. Several weeks ago word was pass
ed around in the great shops of the General
Electric Company at Schenectady that at
any time the laying off Of men, 500 at
time, might be expected. The General
Electric Company is swamped with bust
steel mills are, but the experience Of the
company in the last electric boom showed
that boom collapses very quickly after it
starts.
hat we are entering upon a great rail-
way electriication era there can be no
question One hears every day that some
railway is planning identification of some
part of it's system. The New York Central.
Erie the New Haven and Pennsylvania
have gone into electrification in big way,
and all the roads entering New York are
at work on the electric problem. But the
railways, already hard pressed to raise
funds for buying cars, locomotives and
rails. are not going to make big expendi-
lures right away for identification with
copper at 25 cents a pound. The substitu-
ton of electricity for steam on American
railways will only result from the certain
knowledge that electric operation will mean
lower costs than steam operation. The en-
gineers will not be able to figure out prof
liable investment of capital on sky prices
for copper metal. All these big plans for
electrification are going to wait for lower
prices for the metal
Meanwhile the enormous amount of cap
ital that is going into new copper mines
must result in the course of two or three
years in a very large increase in the copper
output In this country. With copper at 70
cents a pound any old copper mine becomes
highly profitable. Copper can be mined in
favorably located camps at 10 cents a
pound. The mining experts who are max
ing the estimates for new mines are figuring
on basis of 15-cent copper. And even at
this price. 10 cents below the current quo
tation, good properties can be made to show
enormous earnings. Copper mining just now
is much more profitable than copper man
ufacturing. The General Electric Company
has recognized this fact, and is developing
it's own copper mines But this inequality
cannot last very long. With the curtail-
ment of orders for the manufacturers of
copper, and the great development Of new
copper mines it seems to be clear that cop
per metal must eventually seek a lower
level.
4 +
Now that the Great Northern and North
ern Pacific stocks have found a level for the
time being. about 500 and $50, respectively,
below their high prices of last year, the
wonder grows how Mr.. Hartman managed
to pour into the market all the Great North
ern and Northern Pacific that he became
the unwilling possessor Of in the distribu-
Tho
Union Pacific treasury received 10000
shares of Great Northern and 242, 900 shares
Of Northern Pacific. When Mr.. Hartman
had these stocks dumped into his lap we
all knew he didn't want them. They were
minority stocks-and Mr.. Hartman wants
the whole hog none So the uossessor