The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1908-06-21
Passing of Dividends Is
Disturbing to Many
Investors.
{ FRIDAY A TIME
FOR LIQUIDATION
Political Situation Partly Re-
sp0nsible for DeclineS-Rail-
roads Fall Off During Week.


important 10 cause traders TO stop and
think; to check any disposition 10
higher prices, and to start a reaction
which, while mild as yet, may be more
or less aggressive later on.
Probably the jolt of the week was
the passing of the big Four" divi-
dend. That another Vanderbilt road
Ashould find it necessary to disappoint
tits shareholders is taken to mean that
kconditlons in railroad circles are acute.
: There is little news in this. as they
khave been acute with many Of the less
appointment roads for weeks. For the
tmonth Of April the net earnings of lO5
brauroad companies decreased I.6S per
Scent. With such showing as this it
sis evident that 1t is no time for bOOms
: in the security market.
Taft Nomination Should Help.
theoretical" and fundamental" are
Two words that have been much used
during the last few days by brokers
land financial writer's In describing their
views on conditions. Theoretically,
stocks should rise because the general
public doesn't hold much stock and be-
cause there is an abundance Cf cheap
money-perhaps more than there has
been at any time in years Theoretic-
ally, the action Of the Chicago conven-
ton should have caused a boom In the
stock market. Everybody said i would
on the theory that next March would
mark the end OF President ROosevelt's
term of office, and while Taft $ adher-
enCe TO my policies sounded we'll
enough in public prints, the nominee
would, in the event of his election, have
. policies OF his own. that many seem TO
= think would be rather IN the line Of
building up trade and commerce with
less invective and the use OF Cewer
threats.
Everybody expected a boom in the
market on the announcement OF the
nomination. and, as usual, found the
unexpected happening. Friday the mar
ket developed the most serious evil
dences OF weakness that have been no
ticed since the rally started In March.
For the time being the political situa-
. tiOn was forgotten, and the reduction
In dividends. passing OF dividends en-
tireIy, and the poor railroad earnings
became the real influences OF the day.
B. & o. Shows Decrease.
Following the Big Four announce
ment came the news that the Louisville
and Nashville had cut the dividend on
: their stock, and il was also learned
sathat the Republic Iron and Steel Com
pauy would pass a dividend on pre-
1erred stock. Baltimore and Ohio sent
- SIS report for April, showing a net
loss Of 81, S54. 1S5. and a gross decrease
? or s.. O2. S55 IN earnings. Baltimore and
Ohio is a big railroad property, and a
net decrease Of a million a month is a
( serious matter.
These Influences tended to unsettle
the faith Of many small investors, and
3 brought considerable stock onto the
Fmarket- Il also caused a cleanup on
stocks held on margins. both OF which
2 operations nave been going on for some
{ little time in a quiet manner.
This explains reasonably well the
4 fundamental condition" Moreover,
the usual summer dullness and political
situation are not likely 20 bring about
any change in conditions IN the "funda-
mental conditions.
Money will be very easy until crop
movement starts. With good crops
and the election out of the way, Wall
Street boomers viii find all conditions
favorable, In the event of Mr.. Taft's
election. and there IS but little question
that they viii clear the decks for &C
! tion and blaze away, and the public
VII come trailing along in good shape.
Markets viii Move Slowly.
IN the meantime the market viii prob
, ably move along slowly, huctuating
now and then with a small volume OF
buainess, and assume the tone common
: 10 a purely professional market.
As there was a master in charge of
the late convOcation on the shores OF
Lake Michigan, so there is another
master on Wall Street. If he takes it
into his head to give the stock market
a whirl, with plenty of money back Of
him, ne win probably be able to accom-
plish his intents. There is the possibility
that any sharp advance would be taken
advantage OF by parties on whom Z. H
Hartman unloaded stock on the bulge.
for liQuidating holdings Moreover, Mr..
+ Hartman has marketed his Union Pa
! cific bonds-his wad Of Hill stocks, and
perhaps a lot OF other stocks with
them, and is not likely to develop dis
position 10 bull the market. especially
with political uncertainty cutting quite
a factor.
The passing Of the Big Four divi-
dend took 81, 10000 high-grade bonds
: issued by. or guaranteed by this COM
pauy out Of the savings bank class. This
! means that holders OF these bonds will
have to put them on the market.
Despite the "blueness'' g. the story,
there are bright spots that may become
holder and more influential Easy
money is one, the resumption OF bust
ness on a larger scale In many lines or
trade and commerce Is another, and the
end of the political campaign "A third
Prices have not gone on as seriously
as the diagnosis OF the situation would
seem to indicate. Some stocks directly
affected are considerably lower, but the
/ general list is but a couple Of points
of. Some OF the indusJrials are hold
ing well including Copper, Steel. and
Smelter