The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1910-05-01


these viii be appraised at their fun
value; but with the financial district
in its present temper, with the con-
struction element as yet uncertain as
10 the outcome Of events, and an ag-
gressive bear party in the ascendant, good
news fell fat Every UnfavOrable fea-
tUre, on the contrary, was seized upon
and maEuified out Of all proportions
by the party working for lower prices,
and a disturbed condition was further
aggravated on Thursday. when prices
broke with violence by the circulation
Of rUmOrs Of firms in trouble These
reports were entirely gToundIess, but
that fact did not develop until after
the damage was done.
Now IL Is admitted that some Of the
weeks developments were not Of a
character calculated TO stimulate active
speculative operations for the advance.
but assUredly 1t IS the height OF alb
surdity, even for bear trader 10
ignore what IS favorable in the stu
alton The speculative element Ger
taiEly did ignore, for instance, such a
highly important feature as the in
creased dividend declared ~ the T-nffa5
states Steel Corporation u0On its com
mon STOCK. establishing that issue uuon
@ 5-per-Cent basis. with - promise of
extra distributions wii5- warranted.
Not only did the speculative element
ignore the beneficial features OF This
incident but they sought 10 convert IL
into bear argument
Fsv9rs the Investor.
II one julged such matter solely by
/ price fluctuations. the action Of the
board OF directors OF tie Steel CORPORA
/ ton In returning 10 The shareholders a
/ somewhat larger percentage Of their
profits than heretofore would seem I'M
I favorable for the price OF the com
mon stock declined during the week SsS
I points ciosinS at s9is. But the investor
/ who owns Steel common outri yht has
/ no occasion 90 feel disturbed b5 the de-
/ cline. The stock Is now definitely upon
Q a 5-peF-CeU- basis, and at SATURDAY. g
] closing figure Of sJ-s. il is selling al a
price 20 net s. per cent on the money
I This is an attractive yield for a stock
1 and investors throughout the country
I VIII appreciate the fact for all that Wall
/ street, Uermeated with bearish seuti-
! men-. ignores It.
Nothing thar has happened in Wall
/ Street IN q long time so well illustrates
I the EaEaTieE OF a speculative market and
! the peculiar temper Of ALI Street a.
/ the reception given there 10 the Steel
Z Questions the Steel Corporations reports.
] They are held up as models OF wGat
4 the reports OF an industrial corpora
/ ton should be- NO one questions TIT
/ earnings reported quarterly or annually.
/ or the statistics Of production, or the
4 volume Of untitled orders, or the ability
! Of the corporation to earn and pay .
! per cent on the common St0-E- And as
] for the justice Of the matter. il seems
that the Sna-eE llle-s Of a corporation
/ which, during nine years has earned
: an average rate Of 3 per cent. are en-
-frled 70 larger parttclDauCn IN the
/ profits Of their corporation jus as soon
/ as such enhanced distribution IS war
! -anted And an increased distribution
I OF profits by a corporation IS warrant
! ed, aSSEreGlEr when Il TsS made every
/ provision 20 safeguard its future, by
/ putting back enormous sums into the
! property from earnings, and by the ac-
/ cIruuIaJ50u OF a sufficient surplus over
! all requirements TO meet ordinary con
i TinEeDcles-
A Fair Steel Showing.
All this the steel Corporation has
done Up TO June last it had put back
mo the company 500. 81, 90 out Of earn
inEs alone. enormously Increasing the
capacity Of finished products; while dur
ing the last quarterly period, out 81
earnings Of Ss7.6l6.S75. after providing
S6II3.5 $50 for depreciation and replace
ment and S7-s1l,9sa for interest and cor
poration sinking fund. rreya was left q
balance ~ S2L19I, 81 for Tie quarterly
| dividend sof ia per cent on the preferret
! stock, calling fer S5-304,919, and the pay
meut Of the rs per cent on the com
mon stock calling for S6yS73-4S1, leaving
S1I.522,531 surplus for the qUa-=er- Gu
Of this the CORPORATION reserves 8. O00 -
to an account for the purchase OF new
property, carrying balance forward d
Now, the above IS not a poor showing
l in fact II Is fine showing But Wal
street pTOfeSSed 10 be very much disap
pointed over the exhibit And IL IS vel
{ 10 bear the reasons for this CiSSppCint
r1enc in mind for fl throws some IiEh
on the peculiar condition of affairs pre-
VailinE in the present Security marker
/ For instance some one had made Al
unofficial guess that steel earnings 10
the quarter would be between S39. 90
and S41O16l01- Hence when they turnct
out 20 have been SS5.616,SI6, the speCUla
tive element grofesSs,d dreadful disap
pC-nCme1t- That the earnings ar
actually S14,6e5.@0S larger than the sam
lOuaTteT in 1863 was totally ignored
Then the Spectators were dreadful.
/ disappointed. also. because the un
ifIled orders on hane March 81, 1916
1 amounted TO 5.F02,514 tons a year a 3
I the untitled orders on hand March 81
1910. were 3.542.aqJ. And so the pTeSeu
year shows a prospective business, a
| this time, 1.S59.9l9 IONS greater But n
/ attention was paid 10 this, solely for IN
reason that on December 81, last. IN
] filed orders on hand were greater b
[ 52451I tons than now The fact that tn
steel cOmpany's orders Almost invaris bl
fail of between the December an
/ March quarter, and that tley did so
year ago, was also ignored. entirely
Slight Business Re;essions.
The reception Of the increased div
dend on United States Steel common
cited here, and the details are given &
some length. chiefly because il afford
such a striking illustration Of Ii
strange condition Of mind which no
prevails in the speculative market r
vOrable developments have been ignore
entirely. OF they are viewed with an a
Of suspicion How absurd this is Ca
ried TO its logical conclusion. Il woul
appear that the speculative element va
appointed in one Particular becaus
some ones mere guess q wat the ear;
fnEs OF the Steel COTpUretiOn would /
was In error; for, despite the slight n
cesSfOn from the December quarter
there has almost always been such
recession-and despite the slight faIIin
of in unified orders, which is the cas-
quite frequently. the report OF the Ste
Corporation was not bad, but quite
the contraTy-in fact, better repo
has resulted in only few quarters
the last nine years