The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-03-23
STOCK MARKET
IS UNSETTLED
Necessity for Reduction in
Dividends Sure to Bring
Lower Prices.
SHRiNKAGE IN EARNINGS
SPECULATION AS TO EXTENT OF
REVIVAL IN BUSINESS.

New. York, March 22.-The action of
the securities market last week was az
fected by what has been accomplished
previously in discounting an improve
ment in the conditions by the consider
able rise i'm prices which had occurred.
The attractive profits which had ac-
crued on holdings bought before the
rise set in induced much selling to real
lie. and some moderate broadening of
the speculative demand for stocks ia
cilitated this movement.
The disposition to take profits was
sufficient TO make its impression on
prices, and the action of the stock mar
ket was unsettled and irregular in con-
sequence. Added to this influence were
some occurrences which raised ques-
tons of the rate and the extent to
which improvement In business had
gone.
Action toward reduction of dividends
IN several cases centered again on that
subject, and the probabilities were cam
vassed with some uneasiness of how far
the tendency might extend. The reduc-
ton OF the New York Central dividend
from to a per cent basis was the
most important action in this line.
There was also the passing of the divi-
dend on CrUcible Steel preferred and on
Union Typewriter stock and the reduc-
ton of the dividend OF the Rio Tinto
Mining company, the great copper min
ing company in the European field.
Seeking Lower Level.
1t has been considered inevitable for
some time past that dividends on some
OF the railroad stocks would come down
and the prices of the stocks have moved
10 price level which was supposed
10 measure the expected reduction in
the return. The sensitiveness of prices
last week TO the news would indicate
that some revision of estimate was in
progress as to the requisite change in
prices called for by the expected chan
ges. The question was affected by the
reports of earnings of railroads coming
TO hand, the persisting rate of shrink
age in both gross earnings and profits
disclosed and the obstacles which SEEM
ed TO be opposed to adjustment of ex-
penses to the diminished earning power
of the companies. The previous weeks
rise in stocks was predicated in an i'm
portant extent on the hopes aroused by
reports of conferences in progress at
Washington that permission of the in
terstate commerce commission to the
railroads to raise freight charges was
planned, coupled with assurances that
wages of labor might be secured in a
proportionate share in the increased re-
turn. Confidence in the success of this
project waned in the financial district,
and fears have grown that the adjust
ment must proceed along the lines of
reduction of wages. with disturbing
disputes likely to be involved.
Reduced Dividends Necessary.
The impression is created also that
railroad corporations are inclined to en-
terrain dividend reductions as a suit
able policy to pursue as an acknOWl-
edged necessity in conformity with the
enforced retrenchment of outlay for
services on their lines
There were constant fluctuations of
speculative sentiment during the week
owing to the efforts at Washington to
work out a legislative program for the
amendment of the Sherman antitrust
law.
The revival of investment demand for
new capital issues is still awaited. The
announcement during the week of the
Illinois Central financial plan, invOlv-
ing attractive subscription privileges to
stockholders, dispOses of but one of
many measures for new financing that
are known TO be Impending and con-
sidered necessary for the carrying out
of projects which are relied upon to
furnish demand for commodities. The
plan did not arouse an encouraging re-
Spouse in the action of the stock, how
ever.
In the London market the sluggish
response TO new issues of securities, in
spite of the growing accumulation of
funds in bank reserves and the result
ing decline in interest rates, is much
commented upon and complained of.