The Birmingham age-herald., 1909-10-24
NICHOLAS WALL
 STREET LETTER Stock Market Is Huge Dice
 Thrower's Game THE PROPOSED MERGER Note of Encouragement Permeates Confidential Talk of Combination
 of Independent Iron and
 Steel Companies.
BY w. G. NICHOLAS.


 New York, October 2S.-(Special)- has worked into something like dice- throwers stock market. It has become a huge trading affair." It behaves won- derfully as though some of the pools, cliques and plunging operators are swash- ing around with big blocks of stock for which they would like to make a market and do not seem able to find one exactly to their liking. There has rarely been on the stock exchange more fragrant manipulation than that which has been going on in Steel and Reading. In Steel particularly great blocks of stock are thrown about and the price is churned up and down with apparent utter disregard to legitimate trade and market condi- tions.
 The operations of the Steel pool are of such magnitude and audacity as to seri- ously alarm investment holders and specu- lative dealers of moderate means. They do not know what to make of things and they can get no explanation which is in the least satisfactory
 Authentic statements of big earnings and prospects of still greater revenues 4 for the next year are available to every body and on these statements the public has been heavy buyer of the securities of the corporation. Those who have their stock bought outright heavily mar gned are in position to support their investments and a majority of them are doing so, but there exists an element which Is very much disturbed over the daily whirlwind action on the stock ex- change.
 The explanation which seems to be most reasonable and which is accepted most generally is that large volume of Steel common which has been carried in Lon-s don for months for New York account is in process of transfer back to this city, move made desirable by the advance in the Bank of England rate.
 So long as money could be borrowed in London at 2h per cent and under the pool preferred to leave the account un- disturbed but when the rate was jumped on successive weeks a change came over the situation and the New York borrow CTS in London made haste to shift the account back home. This transaction ne- cessitated the selling of the stock for London and It's repurchase here. Mani- festly it was to the interest of the pool to churn prices up while the selling was going on and then to organize a break in order to buy back the stuff at lowest possible prices.
 This seems. to be the deal that has been going on for the last couple Of weeks. according to those who are well in- formed as to the International arbitrage market. There has also been important payment of money borrowed In London for American account on Union Pacific, Southern Pacific, St. Paul and New York Central All this has been a disturbing feature and no one seems quite able to figure how it is going to work out or ex- actly how it is going to affect prices Of stocks in the immediate future. Coming at time when the supply of money to finance stock market speculation Is rum ming low hereabouts, the natural conclu- sion Is very generally reached that the influence on prices will continue to be adversely felt for some little time to come. a ', A note of Encouragement permeates the { confidential talk of those who have been working for months the scheme to ! merge the independent iron and steel companies. The trouble is in connection with the underwriting. The big bank K ing houses do not seem to be quite so k willing to lend their names to the en- \ terprise as they were awhile back. One < house in particular, the most import ant of the lot, shows unmistakable symp- I toms of cold feet. This development has \ thrown larger burden of responsibility upon the capitalists directly interested than they had been figuring on and they do not like it. The gross amount of the underwriting required Is about $100,- ] 100000 of which the promoters are will { ing to subscribe one-tenth provided the N other 90 per cent can be arranged for.
 It was admitted day or two ago that nowhere near this amount had been pro- vided and that unless J. P. Morgan 6 Co., could be induced to come out openly in favor of the project and lend it's ac- tive support the plan was in imminent danger of falling through. Representa- tives of practically every important iron and steel company scheduled to go into the combination had been in New York all fall and there have been almost daily and nightly meetings and conferences go- ing on among them at the Waldorf. Hol- land House and offices in the downtown district. Officials and the big capital ists identified wiht the steel trust have let it be known that they view with friendly eyes tho efforts to bring about a combine of the Independents but some- thing very much stronger and more sub stantial than mere moral support is now demanded. N
 It does not seem to be forthcoming on generous scale which cordial conver- sation had led the promoters and would be participants to look for. And now