New-York tribune., 1910-12-11
ALLAWAY'S REVIEW


of helpful Developments. stand sturdily
bullish--conversationa They who be-
lieve that inside interests have been
secretly liquidating, who expect further
recessions and predict even market de-
moralization. stand sturdily-cOnversa-
tionally. Stock Exchange transactions
partake much more OF language than OF
either purchase or sale.
In nine out of ten cases the srussome
forecasts of professional spectators
come 10 nothingness: TO recite the list
OF bear fukes would tire any chrOnicIer.
We were going TO have money market
distress-there is ease beyond expecta-
ton. We were threatened with railway
earnings paralysis-there persists gross
increase upon gross increase. We were
asked to prepare for Supreme Court de-
clsionS of corporation determination
cnaracter-there comes no such decision
such decisions as do come are excel
lently different II is needless TO round
out the list of sorrows scheduled In
practically every instance the pessinistic
prophecies have for sequel what IS agree
able, helpful.
In the bear plan Of campaign nothing
has had quite so much emphasis as the
sad prospect ahead for the United states
Steel Corporation. Its business was in
woeful shape. No orders were IN hand.
none in prospect. Prices were vanishing.
There was nothing at hand, nothing in
sight, but trouble. trouble, trOuble. Yet
the truth of the situation Is what?
Through year after year of mixed pros
porous and depressed business conditions
the United States Steel Corporation has
been earning an average dividend for It's
ina tho
cent, and IS paying but 5 per cent
Here Is wide margin Of conservative
insurance. AZ the steel business stands
to-day it could sufer-sOmethIng quite
inconceivable-a long drawn out session
Of hard times without iInpatring, from
the financial point of view, the capacity
os the corporation to maintain this very
conservative dividend distribution The
steel business Is no longer the toy OF
nOmentary fiuctuation. Under the man
agenent of e H Gary and H c Flick
and George w. Perkins and the other
associates of j. P. Morgan there is sc1en-
tifc accomplishment Of results While
one year may compare favorably OF I'M
fsvorab bly, with another year, the net
average outcome is assured In so ar
as the dividend on Steel common Is con-
cerned there is not a sctntflla OF DOUBT
that the present ) per cent rate will De
maintained and Is just plainly conserva-
tive. A much larger rate could be es-
tablished without impairment TO Steel
treasury funds And IN this fact-th1s
splendid accomplishment Of business
methods and business wisdOm-lies the
of United States Steel Cor
roration methods This premier Amert-
can corporation is premier IN plan. scope
and achievement. However It's stock
may 1uctuate, under stress or specuIa-
tive manipulation, there can be no doubt
as to the constant accretion of intrinsic
vaIue. gauged by what the company Is
doing and what to much larger extent II
is certain to do At the present market
price United States Steel common stock
can be bought to yield close TO per
cent as an investment Here is a re-
markable opportunity presented 10 ooth
small and large capitalists.
Among the news announcements OF
he week consequence has been given 70
he United States Court decision as 20
he legitimacy Of transactions between
he coal producing and carrying COM
,aniea It had been apprehended that
his decision would be adverse to the
point Of q serious Interference with the
business of the big anthracite corpora
ions. railways and producers alike Act
ialIy the determination is far different
Iet II is found that the Temple Iron
selected vehicle for CO.
been occupying an un-
warranted position-that in so far as the
Temple Iron Company IS concerned,
reading. Lackawanna. Lehigh Valley
md the rest are in conflict with the law
They are given the opportunity TO re-
ede from this relationship They are
lot penalized. They are required merely
o recognize the law. 10 amend their
In every other particular
brought before the Court IN this COM
,rehensive case the methods and actions
f the coal railroad companies are con-
lrmed as legal. as natural business pro-
edure.
In appreciation OF this decision the
ecurity market has responded in sub
tantial advances for every one of the
fected railroad stocks The decision
nay be regarded as epOchal-nOt yet TO
ny extent amply recognized upon the
stock Exchange. Apropos OF the sig
ff1cance of what Is involved this IS
aid to me by an authority of exceptional
Importance in the coal trade;
1T seems to me that this decision
egardfng the Temple Iron Company IS
cry favorable to the railroads l thought
urely the purchase contracts would be
declared Illegal, but not only does the
ourt avoid that decision but the rail-
Dads are held to be not conspiratOrs on
rices If the Temple Iron Company
lust be dissolved. 1t would be q very
asy thing TO do: each Of the companies
Guild take the coIIieries that are natu-
ally tributary to their lines. pay a fair
rice for them. and divide the money
ley have made The railroads now
wn all the Temple stock There Is less
nan million and a half of bonds out
and probably more than that
mount In liquid assets is in the treas
ry. This ought to be a big bull card
q Reading and Lehigh Valley especial
; The simplest way to dissolve the
empIe Iron Company would be 10 con-
ey the collieries back TO Simpson &
Watkins the original owners. accounting
Dr. what the railroads have made since
1ey have held them-together with the
resent treasury assets. Simpson & Wat
ins returning the original purchase
rice"
Action upon this suggestion would IN
any ways prove consequential Incl
sntaIly il would provide some millions
Immediate profit for Clarence n
mnsOu and Thomas w Watkins
rough whose guidance and co-opera-
on rha Anthracite railroads OF the cOun-
~ we're rescued from anarchy and
,n,netftfve destruction. The Court de-
rio,, yvould seem to make IL altogether
ear that Nressrs. Simpson & Watkins
. entitled to an equitable accounting
Underlying all current market move
ents are economic conditiOns-tendfng
ward the cheapening OF producuon-
nd evidence Of success IN large mea-
ire is evident along such lines Quot