Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-04-03
FINANCIAL ICE Thin
Stock List Has Been Full of
Holes and Rotten Spots.
PUBLIC IS GROWING WISE
No Longer Buys on the Bulge and
Sells on the Slump.
NEW ENGLAND HARD HIT
Holds Half Billion Dollars Of Cop
per Stocks of Somewhat
Doubtful Value.
BY ". G. NICHOLAS.

NEW YORK, April 2, 1910
The ice has been thin and full Of rotten
spots the last week or more. In a big,
broad sense the general market has been
fairly we'll sustained, but it has been hard
lines for odds and ends and for, several
specialties of hitherto good repute. There
have been enough accidents on the wrong
side Of the market to cause indefinable
distrust, and a good many traders who
act on instinct when they see something
they do not understand closed up their
deals and became spectators until the
situation cleared.
The average of prices has receded some
what and there seems to have been a
weakening Of the buying powers, very
essential element to live, healthy stock
market At the same time there does not
appear to be very important enlarge
ment of the short interest The bears act
as though they were as much in doubt as
to the future course of prices as the bulls.
For one thing, the decided reactionary
tendency of the bond market has been a
decided influence in the stock depart
ment. There goes on continually drip
ping of bonds on account of large mass
of individual holders. Insurance compa-
MES, trust companies and estates are also
letting go of bonds where they can do so
without loss, although both institutions
and carefully managed estates are handi-
capped by the fact that they have trouble
in renvesting capital thus released. They
are compelled by law and by rules of
common prudence, to put their money into
safe things, and the list of safe things
with good income returns is notably re-
stricted and becoming more so all the
time. Since the first of the year the bond
market has been overfed, and that is one
of the reasons for the present torpidity.
Given time TO digest the stuff that has
been taken into the system there may
and possibly will be recovery.
New England Overlooked.
New England at this particular juno
ture is quarter in which especial weak
ness has developed. This is possibly on
account of losses which New England in
vestors have sustained in copper specula-
ton for the last year, losses which have
been piling up steadily and which have
mounted into formidable totals The col
lapse in CRANKY stock has served to call
attention in a very ugly fashion to the
| fact that New England is tremendously
overloaded with copper securities.
CRANKY is a comparatively small cop
per company, it's entire capital being $13,-
100000, but it has been supposedly a very
safe proposition, and a great many con-
sentative people went into it,. The sud
den discovery that it's ore reserves had
slump in the price. and that right on the
heels Of a new issue. The general cop
per situation has been weak for good
while and the public sense of decency
has been shocked by the preparations go-
ing on for stupendous merger of cop
per companies on an abSurdly inflated
valuation. All of these things have con-
tributed to an awakening among New
England investors and spectators. The
prospects are that they are on the road
to very bad fall, and when these canny
Yankee people get stung on the stocks
they get stung for keeps.
New England runs to fads and Crazes.
1t was burnt alive years ago on Union
Pacific and later on Atchison, losing
scores of millions of hard earned dol
lars. 1t has hundreds of millions invest
ed in telephone and telegraph stocks and
has had uninterrupted success in that in
dustrial speciality. For several years past
it has been putting immense sums into
copper stocks, the astounding record OF
| Calumet & Hecla having been the great
incentive and stimulant. Today New
England probably has $500, 100000 in cop
per stocks, great deal of which is in
margins on speculative ventures. The
future for that huge mass of investment
capital is certainly not bright at this
time Indeed, the situation Is so serious
as to endanger the entire stock market
fabric. for there cannot be heavy losses
| in one division without its effects being
| felt in every direction.
Stock Exchange Reforms.
It is a positive pleasure to be able to
mention actual reforms In the New York
Stock Exchange. The writer has been
very free in criticism of the methods and
| practices on the exchange and in call
| ing attention to abuses which have
grown up under the system allowed there.
| This week the board of governors of that
| in INT took official action which will
| have most healthy result in purging
! the exchange of many of the most serious
| abuses which have for years operated to
the losses and disadvantage of the pub
| lie.
| The authorities Of the exchange have
| adopted measures to cut the claws of
| the specialists" many of whom have
| grown rich Scalping orders and juggling
plungers and brokers for cliques and
| pools manipulating prices by dealing
| only in round lots of 5000 and 10000
shares. By refusing to take cognizance
| have been enabled to artificially manipu-
| late prices all out of proper lines
| The little fellow trying to buy or sell
| 100 shares of stock has been as unable
to get the attention of tho plungers as
| for an insurgent to catch the eye of the
| Speaker. Hereafter they can compel the
big fellows to split their round lot trade.
| In accordance with action taken some
| months ago the unlisted division ON the
| exchange was abolished by limitation the
| last day of March. These are the most
| important reforms inaugurated and they
| will go a long way to re-establish the
| confidence of the public in the integrity
| of the institution. The next and by all
| means most important issue to be tackled
| will be plan to stop the misuse Of the
| funds of banks and trust companies by
| the high financiers for stock market pur-
poses. This is probably beyond the reach
| Of the authorities of the stock exchange,
but the evil can be remedied by laws
| which will more rigidly prevent the over
4 certification of checks which is now in
| dulged in in defiance of existing imper-
fectly drawn statutes.
Lehigh's Extra Dividend.
The reason why Lehigh Valley stock
steadily advanced through a period of
| several months from around 60 to above
115 seems to have been because the stock
| was worth the money, as witness the an
nounced distribution of an extra dividend
Of S25 on each f1fty-dollar share, an as-
gregate melon-cutting of $2O.OO0OOO. Phil
| adelphia, which Is the official headuuar-
ters of the company, also bulletins that
| shareholders will have chance to sub
scribe for a new issue Of SIC. OOO. 900 stock
| at par, an arrangement that will put q
very large sum of money in the treasury
for improvements and payment of matur-
ing bonds. 1t is very generally held that
these large surplus accumulations should
| legitimately be transformed into share
| capitalization, and this Lehign move Is to
that end. The management feels that