New-York tribune., 1910-05-01


tfons-IiqufGatIon. why holders OF secu-
rites should have taken fright at THIS
particular time il not easy to determine
but that such disposition exists is IN
Questionable Were market sentiment or
cheerful character such Important events
as the Supreme Court decision and rns
advanced Steel dividend must have eS-
Arted highly favoraDis influence. That
they did not ls proof positive that tn6r7
is weakening Of confidence among share
holders There is nothing in the security
market situation approaching den1oFahz-
ing conditions but there are persistent
sales all along the line 1t IS Idle 70 trY
to account for depression by ascIl0-ng 9
il 20 short selling Declines prodnced
merely BY bear raids sre short lived ara
o,,f1E1c correct themselves but certatrlY
anv short lines pUI out during the pas1
few weeks found easy opportunity 1oF
profitable covertug-Wh1ch means n1~
vond peradventure that actual sales are
upon a large scale. There fs noLnlng 3---s,-ll n
sight TO indicate cessation OF this move
ment.
SentinentaIy aggravst ting the situation
is loud agitation concerning an alleged
corner in cotton Apparently the buyers
OF cotton are well able 70 take care or
their purchases. but there IS natural un~
easInAss over the financing Of CON-
n1erctaI operation calling for the irnn1e-
dfate employment OF practically twenty
million dollars. To this situation IS at
trfbuted the sharp rise in loan rates for
money Wall Street watches the situd-
tion with critical nervousness
Another disturbing influence mas Feel
abnormal weather conditions throughout
the West and South, menacinS crop
growth But, as always, such stories are
NOT 70 be taken too seriously--there IS Al
vavs the disposition 20 Cverestlnl2t9
damage Quotations in the grain mar
kets do not reflect serious apprehension.
On the bull side there IS loud-Te1ccrns
cs the announced determination by rail-
roads to raise freight rates. But thers
are two sides to this question. Tbers
has been dividend raising lately and IN
creases in wages. II is not unnatural Tor
the public to ask whether n IS 70 bear
the burden OF high dividends ana hig1
wages through the payment Of high
freight rates. IF railroads are so pros
porous that they can increase stockhold-
ers' income and pay more TO employeeS
the inevitable query will arise: Wny
raise freight rates? There IS no getIlhS
around the fact that an increased rata
is practically increased taxation OF th9
public. II may be that such increases
are warranted-that fs a point for DIS
cussion between the railroads and tns
Interstate Commerce COn1n1iSsfon-bul =
is not supposable that public JOY VIII DC
lSindIed at the announcement or that th9
public will rush in to buy securities. pc
cause of this contemplated act IP9
matter is 2 disturbance rather than a
reassuring feature-bouud torcause n1'fe1
discussion, bound to arouse antagonisfn
at time when corporate Management
is fercely assailed-
-. From no point of view does there seem
to be promise of reversal for some tins
to come in security market sentiment
So long as actual holders Of stocks. for
whatever reason continue to sell Just 50
long must prices continue TO decline IN
til they reach a point where actual valu7
and earning power induce buying, ~
present such considerations are not
taken into acCount-there is Just simply
steady. discoUrasing outPour OF securL-
ties. Rallies are feeble and OF short du.-
ration On the buying side there is NJ
aggressiveness. and. seemingly. no lead
ership Concerted support IS FiSiS!A no
where These are disagrseaOle facts.
but it is tnControTertibie that taey ere
facts
Take the case of Steel common -iTs-
medistelv after the five per cent -divt-
dend was declared last wednesday Iha
stock sold close TO So It is now around
so. What possible explanation or s'Icu
movement can there be except actual
liquidation? At it's present price IL navs
over s per cent. to investors and is m
every way in more satisfactory position
than when il vas selling fifteen points
higher. Bear raidiRs cannot explain Uits
declfne-there is only one explanation--'
liquidation.
Such railway earnings reports as haTe
beeu made This Ueak present dtsappotnf-
ing features. Cross earnings increases
run into big figures. but exhibits Of vet
show very differently - Atch!Son ard
Union Pacific for example converting
tremendous gross gains into actual net
decreases Operations costs rise. labor.
material and everything else advanced
To some extent public hesitation a.
to the market may be traceabIe 80 thsss
earnings statements. for in recent times
such periodic reports have close scrutiny.
It was the exceptional shOwinS OF rrr
earnings expansion that largely Intu-
enCed public sentiment IN tEe GeNS4Cp-
ment of the market which followed IE>S
1907 panic-net earnings keeping pace.
even running ahead. of gross gains
Whatsoever the influence. what CEr-
tainlv is now shown with clsarrsSs and
emphasis Is that the Wall street market
proceeds almost wholly without any out
side interest helping 1t There was q
month or so ago considerable buying Of
odd-lots but this feature has virtually
disappeared-Or. at least, there Is %
further announcement from quarters
where hitherto there has alwayS been
disposition not only 70 chronicle y but
TO enlarge upon IL
Meantime. bulletins come daily II rev
security issues that are ready or I'm Co1sss
OF arrangement 81 Paul with $4,000
600 bonds. Chesapeake and ohio with
Sc .O0O 0eO bonds and as much more sFHc1S
these ars examples Such offhaHd al
ditions 10 Wall Streets already stupsN-
dous totals do not provide buoyant s2lrit
in investment quarters. II vas RncOur-
aging when New York Central VAS Te-
Gently able TO announce an increase ~
its dividend-that increase being piep9
practicable through an Increased dls-
tribution from the Lake Shore treaSnrN-
the lake shore disbursement, hoWeV ir'
being followed Immediately BY an lsSue
of Lake Shore obligations, twice as SiS
as the amount transferred from IT'S CrsaS-
ury 10 New York CentrafS BiNidsn"