The Birmingham age-herald., 1909-09-05
STOCK MARKET IS
 VERY PUzzL|NG Prices Have Advanced With
 Very Little Incentive PUBLIC RALLIES TO AID Through All the Excitement Steel Stocks Have Been Very Strong and Other Stocks Have Been
 Benefited By Advance.
PUBLIC RALLIES TO AID
BY w. G. NICHOLAS.

made it appear that the market was en-
 shrouded in mystery and saturated with l plots and conspiracies whereas it now be-
 gins to appear that affairs have been talk
 ing very nearly natural and logical l course, one in substantial conformity to
 the announced expectations of months. l Ever since last spring when the market
 entered upon its latest (you will observe | said latest, not last chapter of bullish | progress it has been freely predicted that | sometime during the summer or early | autumn the big people who had been en- | gineering the campaign for a year or more would take profits on their specula- tive lines and let the public take the load | and carry it.
 The market went on and on, going stronger and higher than anybody looked for. It turns out that the big people aforementioned did realize on their spec lative holdings along during the latter phases of the advance and that they did
 not have to sell any considerable lines
 on the back track from top levels. Not so, however, with an active trailing contingent which had been partially in
 
 campaign and who found themselves
 loaded 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 the habit of many people in Wall street who kindly allow the public and their friends to get in on good things
 There times in every 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 1t incumbent upon them to create diversion under cover of which they might unload and get away with a full share of profits. They had undeserved success and by filling the air of Wall street with all sorts of rumors and mys- tery they worked up a big furore. It was then that Union Pacific common and preferred scared to 219 and 119 respectively.
 What happened afterwards is 8 matter of public tape record. Accusation of bad
 faith against the insiders are for the most part unfounded. Creduous people accepted without inquiry the widest of romances about Union Pacific segregation
 plans about to be sprung and also about
 every conceivable melon cutting enter prise that riotous imagination might suggest.
 The net result has been that condition of fright and nervousness was engendered and a 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 exhausted margins. Altogether it was demnition unpleasant situation.
 The public found itself loaded with quite as many stocks 1t was able to take care of and even down to this writ ing there Is a feeling that prices may
 have to go lower before the surplusage
 finds settled Judgement. The investment
 public, however, has rallied splendidly to the market
 There has been very general and inteli- gent recognition of the fact that business
 conditions justify current prices and higher. Railroad earnings everywhere , are satisfactory in the highest degree
 Expectation of bounteous crops is in a
 fair way to be realized, with the excep- ton of some curtailment in cotton and shading down of extrayagant estimates of the corn yield.
 Industries in every department of activ-
  tance in the enumeration of favorable factors must be mentioned that of assur- ances of reasonably cheap money through
 out the crop moving period and the sub sequent winter months. A knowledge
 that there is hung up in the background | a $500 COG, 900 "Aldrich Reserve fund which can be drawn upon in case of emergency | is a great saving element. It acts as a "goyernorr and tends to the repression
 <>f ha If also an insurance against unhealthy sea- sons of excitement and worry.
 All of these things conduce to feeling of underlying confidence and faith in the future They inspire investors with a sense of security against financial and
 commercial accident. They are the under | lying foundational strength of the stock | market and of business in general. Throughout all the excitement and wor- l ry of the last fortnight the steel stocks l have been conspicuously strong. That Is | because a powerful and rich element. | which knows a good deal about the cor l poration's affairs and its prospects have 1 unbounded faith in the future, and there l is an earnest and courageous desire to l buy on every soft spot It is of common | gossip that those nearest the inside are l the strongest bulls on, the property, and l that the specialists of the iron and steel | industry are in entire accord with the | Mefgan prophecy that steel common l would cross par before the end of the | first. quarter of 1910.
 Estimates for the earnings of the third l quarter of the current year ranged from
 s35, ,OOO 600 to $40.0O0000. It is of common
 report that MT. Charles W. Schwab, ! the former president of the corporation, 1 offers to wager $l0,009 that in some one l quarter of 1910 earnings of the corpora
 ton will be SSo.OO0.OO0.
 | It Is worth while to mention here that l by the end of this month the big steel 1 corporation will have worked off the last l of low priced orders booked during that l strenuous period when it was found nec- 1 essary to cut the throats of underbiddng | independents, just to show what could
 be done in emergency. By the way there | is nothing in the Chicago story that a l plan is under way by the management of l the United States Steel Corporation to | convert the remainder of the preferred | stock at 40 into per cent. bond. | No such thought Is entertained by the I mana gement or by anyone of Influence l in the affairs of the corporation. They | had enough of the conversion idea on the | first experiment. which resulted in the l creation of second mortgage bond issue of $146, ,O00,OO0, and the corresponding de- l crease in the preferred stock.
 l At the time of that performance the flu l ture of the great corporation was not full | ly assured and the motive behind the | conversion scheme was said to be the thought on the part of leading financial interests that it might be good thing to | build a raft" of second mortgage bonds upon which to float the tangible assets in kf.--