The Birmingham age-herald., 1909-10-10
NICHOLAS WALL
 STREET LETTER Break In Steel Common Is Dramatic Incident of Week STEEL TRADE PROSPEROUS Strong Movement Is on Foot for Or. ganlzatlon of Independent Steel Companies Into Strong Com
 peting Corporation.
STEEL TRADE PROSPEROUS
BY w. G. NICHOLAS.

NeW York, October 9-The break in Steel common, which was the dramatic incident of the week, looked very much ike an engineered "shake-out" The big pool In Steel has been playing for the good will of the public for a long time. and won 1t, but there are time in every Dull campaign when the managers there or have "too much company" This was one Of those occasions. Everybody was crazy to buy Steel common, and the mar ket was in danger of getting out of the control of those who had 1t in hand and who were working 1t up not for the pur- pose or temporary speculative profits so much as to establish it on higher basis. Every office in the street was full of pyramids, accounts which had been spread out thin and purchases made with every few points profit. It was to get rid Of this dangerous element that a shake-out was organized The play went through as though the machinery was oiled for it.
 The moment was taken when the call money market got hard and banks began 10 call loans with unexpected freedom. A note or alarm was sounded, and all at once eAAo 1ecSAN CASlidu66 was IlOOQGQ With sell ing orders in Steel. The rush to capture paper profits before they got away be- came almost rout. Then after three or Tour points had been ripped off a mass or stop-loss orders were caught. The anxiety and the necessity for selling was carried into the second day, and even then the market was left in A nervous state which might easily have been con- Verted into secondary slump for the " nf -4fI shoestring accounts. The buying spirit was strong, however, and there were found thousands of men who were not In the least terrified by the break Rather they looked upon it as God-given chance to get hold of some Steel common and sent in their buying orders to a. very large aggregate. They looked upon the slump for what it was and having no relation whatever to actual trade condt. tions.
 It is known of all men that the steel and iron trade Is wonderfully prosper ous and that the big corporation is nor ally certain of huge earnings for at least another year. with a strong probability of continuance into the more distant fiI- ture. It is also matter of powerful con viction that when Steel common reaches the neighborhood of par there will be generated a colossal short interest which S--@i oseSAay oO toCo do d leverage TOT the boosting of the price another 10 or 1E points. This is the bull market view of tho situation. There is to be found in Wall street very active and strong contingent which has followed Steel com mon from 45 up, which is earnest in the belief that before the end of 1910 the junior stock will cross preferred Here is the way one of the specialists who has made large sum of money on the up. turn states the outlook from his point of observation:
 Steel corporation earned s165 0Oo.oeo is 1907. Would have earned s1s0 100000 in 1907 if panic had not reduced earnings fin last quarter. Plants then in operation are now able to turn out 15 per cent more than two years ago, so 1910 earnings from these plants should be. . $2oo. 900, ,0oO Add Gary in 1910 ............. a. GOO OOC Add Tennessee Coal and Tron. 15,ooo, ,OOC
 Net earnings, 1910 ....... s237 900. .0OC
 The corporation's fixed charges for 1910, including preferred dividend, will not ex- ceed $90,000,000. On the basis Of the above calculation they would be about N45.- 100000 net applicable for dividends on the common stock, equal to nearly 30 per cent Any such figures are hooted at and de. nounced by the bearish element, but they may not be so far out of the way, after all.