Evening star., 1909-09-05
MARKET IS A PUZZLE
Many Plots and ConspiracieS
Are Rumored.
STILL 1T Is ALL LOGICAL
Outlook Is Good for Much Higher
Prices.
UPON A FIRM BASIS, TOO
Steel Mems Strike at McKees Rocks
Causes Criticism of Com
pany's Officials.
UPON A FIRM BASIS. TOO
By w. G. Nicholas.
espondence of The Star.

been continuing puzzle for traders ana
commentators alike. The chronicles have
made it appear that the market was en-
shrouded in mystery and saturated with
plots and conspiracies. whereas II now be-
gins TO appear that affairs have been taxi
ing very nearly a natural and logical
course, one in substantial conformity to
the announced expectations of months.
Ever since last spring, when the market
entered upon its latest you will observe
I said latest. not lasD chapter of bullish
progress, il had been freely predicted that
some time during the summer or early au-
tumn the big people who had been en-
sineering the campaign for a year or more
would take profits on their speculative
lines and let the public take the load and
carry it. The market went on and on
and on, going stronger and higher than
ANYBODY looked for 1t turns out that the
hi. people aforementioned did realize on
their speculative holdings along during
the latter phases of the advances and that
they did not have to sell any considerable
lines on the back track from top levels.
Not so. however, with the active trail
ing" contingent. which had been partially
in the confidence of the managers of the
campaign and who found themselves load
ed To the guards with stocks after the
leaders had liquidated. They had been
told when to get In, but In the hurry and
confusion of the hour the big fellows had
forgotten to give them warning when to
get out. That is a habit of many people in
Wall street who kindly allow the public
and their friends to get in on good things.
There are times in the very bull campaign
when the leaders thereof want outside
help. They do not want society,"" how
ever. when the time arrives to sell out
and take profits.
On this occasion the trailing contingent
felt il incumbent upon them to create a
Of which
unload and get away with full share
of profits. They had undeserved success,
and by filling the air of Wall street with
all sorts of rumors and mystery they
worked up big furor. 1t was then that
Union Pacific common and preferred soar
ed 10 219 and 119, respectively. What hap
pened afterward is matter of public
tape record. Accusations Of bad faith
against the insiders are for the most part
unfounded. Credulous people accepted
without inquiry the widest of romances
about Union Pacific segregation plans
about to be sprung, and also about every
conceivable mellon cutting enterprise that
riotous imagination might suggest The
net result has been that a condition of
fright and nervousness was engendered
and great many traders sold out their
stockS-some in order to save their paper
profits, others because of fright and still
others under duress and the stress of ex-
hausted margins. Altogether 1t was a
very unpleasant situation. The public
stocks II able to take care Of and
evan down 10 this writing there is feel
ing that prices may have to go lower be-
fore the surplusage finds settled lodg-
ment. The investment public. however,
has rallied splendidly to the market.
There has been very general and in
telligent recognition Of the fact that
business conditions justify current
prices and higher Railroad earnings
everywhere are satisfactory in the
highest degree. Expectation Of boun
teous crops is in fair way to be re-
allied, with the exception of some cur
tailment in cotton and shading down
of extravagant estimates of the corn
yield Industries in every department
Of activity are fulfilling hopes. OF first
Importance in the enumeration of IA
vorable factors must be mentioned that
OF assurances of reasonably cheap
Rod and the subsequent winter months
A knowledge that there Is hung
UP in the background five
hundre -million-dollar ''Aldrich re-
upon in case of emergency, is a great
saving element 1t acts as govern
or" and tends to the repression Of the
greed of the money lenders. 1t is also
OF excitement and worry. All of these
things conduce to feeling Of under
lying confidence and faith In the fu-
ture. They inspire investors with a
commercial accident. They are the un-
derlying foundational strength of the
stock market and OF business In gen
eral.
Worry Over Steel Strike.
Throughout all the excitement and
worry or the last fortnight the steel
stocks have been conspicuously strong.
That is because a powerful and rich
element, which knows a good deal about
the corporations affairs and its pros
poets. have unbounded faith in the fu-
ture, and there is an earnest and cour-
aeeous desire 10 buy on every soft spot.
II is of common gossip that those
nearest the inside are the strongest
bulls on the property. and that the
specialists of the iron and steel In
dustry are in entire accord with the
Morgan prophecy that steel common
would cross par before the end of the
first quarter OF 1910. Estimates for
the earnings OF the third quarter of the
current year ranged from s35.o0o,oo0 to
$40, 100000
II is of common report that Charles
w Schwab. former president OF the
corporation, offers TO wager $4,000 that
In some one quarter of 1910 earnings of
the corporation will be $50, 100000. 1t
is worth while TO mention here that
by the end of this month the big steel
trust will have worked off the last of
low-priced orders booked during that
strenuous ptFiOu WHEN II was IOunu
necessary to cut the throats of under
bidding independents just TO show what
could be done in emergency.
BY the way, there Is nothing in the
Chicago story that plan is under way
by the management of the United
States Steel corporation TO convert the
remainder OF the preferred stock at 140
into q ) per cent bond. No such thought
il entertained by the mana cement OF
by any one OF influence in the affairs
OF the corporation They had enough
Of the conversion idea on the first ex-
pertinent, which resulted in the crea-
tiun OF second mortgage bond issue OF
Sli6.000.00o and the corresponding de-
crease in the preferred stock.
Al the time of that performance the
future of the great corporation was not
fully assured, and the motive behind
the conversion scheme was said to be
the thought on the part of leading
financial interests that 1t might be q
good thing TO build raft" of secono
mortgage bonds upon which to float thu
tangible assets in the event of fore
closure. That contingency never arose
get rid of either of the stock issues
conversions.
up in Wall street whose importance anc
strength has not yet been appreciated a
its true value. There are hundreds an'
thousands of men who have operated II