Evening star., 1909-09-12
MOVE WAS INSPIRED
Morgan Credited With Caus-
ing Rise in Stocks.
ITS WISDOM Is DOUBTFUL
So Believe Many Wall Street
Financiers.
TWO PARTIES IN MARKET
Steel Common Picked for Leader OF
the Future as Most
Popular.
ITS WISDOM is DOUBTFUL
TWO PARTIES IN MARKET
Special Correspondence Of The Star.

Special Correspondence Of The Star.
NEW YORK, September II, 1903
AS a demonstration of brute market
strength the manipulated advance in
Union Pacific and other active stocks Fri
day was impressive Whether it will
take away from or add to the store of
public confidence is debatable issue. Mr.
Morgan was credited with having inspired
and generated the tremendous move and
there are many important people in the
financial district who question its wisdom
1t was so obviously manufactured that
nobody was deceived. The work was
raw and the opinion was generally voiced
that no sober second thought operators
and the public would be more likely to be
frightened away than induced to come in
The important banking interests were re-
lied on to come forward with supporting
orders in the event OF rush of senti-
mental selling, but there was certainly
nothing In the death of Mr.. Hartman to
convert previously nervous stock market
into wildly bullish one, yet Fridays
exhibition Of financial athletics was clear
~ designed to create just that belief. In
some Hartman quarters the jugglery on
the stock exchange is believed to have
concealed an Interior intent to discredit
Union Pacific with careful investors and
traders and makes 1t easier for pirates
to accomplish their black flag purposes
with the Hartman treasures. This theory
seems to lack tangible backing.
A fish blooded construction the market
manipulators would like to have the pub
lie put on the demonstration following
Mr.. Harriman's death is that the -situa-
tion has been improved by the effacement
of disturbing and dangerous element;
that Mr.. Harriman's passing makes for
harmony in the world, Of transportation
and finance and in the market place.
THE ghouls have the market was the
comment of q disgusted friend of the late
magnate.
The funny work" which has been done
in the stock market lately has had one
very evident effect 1t has chilled popular
| enthusiasm. There is not as big a public
the last couple of weeks, nowhere near
as big one. There has come upon the
outside speculative world a realization
that the average of prices is pretty high
larger volume. of profit taking than had
been commonly suspected. This is not
easily provable. however. and there seems
to be almost as great a scarcity OF real
stocks as ever. The floating supply ap-
pears to be small in almost every quarter
that Is to say. there is no overwhelming
flood Of stuff offering. 1t only takes a
moderate amount. however, to cause
prices to break. Not alarmingly and not
to the depths, but sufficient to engender
uneasiness and fill the market with
nervous chills.
People are asking themselves IL 1t may
not be true that the good things in the
situation have been discounted sufficiently
for the time being in the general advance
which has already taken place. True,
there has been some recession from top
prices, but the sharp and important
breaks were confined to few specialties
almost entirely as matter Of fact to the
Hartman issues and affiliated or con-
nected stocks.
Two formidable Factions.
1t does not inspire confidence to know
that there are two formidable parties in
the stock market. one bullish only pas
sfEely and ready to do rescue work, and
the other actively seeking for weak spots
and ready to take advantage of every
opening to vigorously attack prices. This
latter party was much in evidence when
the market turned downward after the
unwise attempt to carry the bull cam
paign. too far in Union Pacific and Read
ing. The party is made up Of some of
the most aggressive players in the mar
ket and they are clearly still of the
opinion that 1t will be possible to crowd
quotations lower. They are making every
use of Mr.. Hartman and the uncertain
ties connected with his affairs. They are
also taking account of the fact that when
the public withdraws from a market for
any cause 1t Is prone to keep out until
prices work to materially lower range
before resuming activity. 1t makes no
difference whether the prices are really
too high or not. 1t is enough that the
pubic gets the notion that they are. The
market works into a state which the
historians of the street like to describe as
being invested with psychological quail
ties.
Steel common is picked out for the
market leader of the future. 1t Is the
most popular trading stock on the list
and has degree of merit which makes it
very attractive. An impression prevails
that there has been considerable shifting
of stock ownership among the big inter-
ests lately. Standard Oil people are be-
lieved to have lessened their holdings ma
increased it's lines heavily. There are
many things which go to conform this
theory. The Morgan clique is very noisy
and very insistent in the claim that Steel
common will cross par before the end
of the year. They mass convincing esti-
mates of business and earnings for the
past year or two. They call attention to
the fact that during the quarter-April.
May and June-the period of cutthroat
competition. when prices were $3 to S.
lower than they are now, and when the
corporation was running only about IS
per cent capacity, net profits were about
$50, ,OOO. 600, or s11.OOO.OOO more than fixed
charges. With capacity running 95 per
cent and prices back again almost to
where they were before the cut it is very
easy to figure $3S. 100000 to 100000 the
current quarter, and above $50.OO.000 for
the last quarter of the year. For 1910. on.
capacity of approximately 14.0OO.OOO
tons, they figure over $2OO.0OOOOO net
earnings.
This conclusion is reached by the very
simple process of multiplying tons pro-
duced by $15. The experience of years
shows that the steel corporation aver
ages just about SIS per ton. on output.
The prospect thus presented Is one which
is an unceasing come on for In
vestors and spectators. The outlook
for 1910 is for at least 20 per cent earned
on the common stock, and makes 1t prac-
tically certain that after the first of the
year it will be put on at least per cent