The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1910-03-21
WALL Street
SUFFERS CROUCH
Promulgated by One Jacob H.
Schiff.
VIEWS NOT CONFIRMED
Show Encouraging Conditions.
The Annual Report of the
steel Corporation
BY w. G. NICHOLAS

BY w. G. NICHOLAS
New York, March 2.-The stock market
suffered to some extent the last week
or ten days from Jacob II. Shift
Crouch Mr.. Schiff, it will be remem-
bered, handed out an interview awhile
ago forecasting ultimate war between the
yellow and brown races Of the Orient and
the United States.
He was led to this conclusion by dis
covery that Russia, the unrelentins hater
Of the Jewish race, had formed a trade
alliance with Japan. Having lent a very
influential hand in financing the Japanese
war against Russia, and then having been
| denied participation in Chinese develop
ment loans, he was naturally hurt and
| his grief took the form OF deadly fear
| lest this country become involved in a
war with the Far East.
Feeling this way, 1t was only natural
| that the great banking house of Kuhn
Loeb & Co., of which Mr. Schff is the
| directing member, and the immense Kuhn
Loeb following should give expression to
distrust of existing conditions and fear
of the future by selling out American
securities. This was done on very
| large scale, and the market has had to
struggle with big load of stocks 1t had
not Deen looking Tor.
Being in no mood to help make a mar
ket for the extensive Kuhn-Loeb distribu-
| ton. the really important interests in
| Wall street withdrew support and stood
aside until the furry subsidized. They gave
| the market over to little people and the
| professional element The result has been
general reaction in prices and a re-
! vival of the general distrust which was
felt on the January and early February
slump.
Brokers and operators went around wild
| eyed wondering what the matter was
| and letting their imaEinations run riot as
to hidden causes for the weakness Visible
| material developments weere given the
| very worst possible construction and the
beady minds Of the shoestringers and
| fraction chasers were much perturbed
| over a Ito them beclouded situation.
Argument over the Standard Oil case be-
fore the supreme court. official opinion
on the corporation tax law, discussion in.
congress on the pending railroad bill and
other Washington news were debated in.
| a scarey way in Wall street and the little
people who had the market were agitated
and distressed lest the country go to the
immediate and unprotected bow-wows.
Careful analysis of existing facts as to
the various branches of commerce, trade
and finance do not confirm this despond-
ent view of things. cutie the contrary.
Railroads continue to report very heavy
earnings. both net and gross, the in
dustrials are loading down their books
with new orders for products of every
description, labor disturbances seem to be
working to a fairly satisfactory finish,
and the increasing demands for capital
with which to do an enlarged and still
enlarging volume of business betokens
healthy growth and renewed courage for
tee ft1tt fl,, ,f x.f
| prise.
This is reflected in Il hardening time
rate for money east and west, develop
ment entirely free from panic symptoms
or mental disturbances of any sort in
quarters where the phenomenon might
carry weight.
The annual report OF the United States
Steel corporation, which was given to
the public this week might have produced
a sensationally bullish effect under some
market conditions, but on this occasion
they fell fiat. The general facts con-
tanned in the report have been known for
several weeks, but the detailed state
ment contained a mass of facts and fig
ures in our national industrial evolution.
The great steel combination is by long
odds the most powerful manufacturing
concern in the world, and as such every
body should be interested in it's affairs,
If for no other reason than as study.
The corporation last year spent $151, 000
001 In wages paid $4,000 employees. 1t did
q gross business of S646. 600. 600 and turned
out in blast furnace product 100000
tons. 1t admits net profits of S1Sl. 100000
or more than 18 per cent on its $1000,00O
900 capitalization. The actual share capt.
tai Is over 500 100000 shy of that figure.
very considerable block of preferred
having been converted into second mortS
h,,t thnt,
what the corporation started with, and
II is nice round amount to roll under
the tongue.
A noteworthy feature Of the report is
the admission that the corporation has a
working capital OF $3.50. 100000. a loose sur
plus of $751;. 100000 and $5s,5o00 900 cash on
hand This statement reveals the steel
corporation as one of the most powerful
banking Institutions in America. Its re-
sources from banking viewpoint are
larger even than those of the National
City bank. with its 900 surplus and
capital, and ranking on at least even
terms with the Standard Oil trust with
actual available cash capital and quick
assets have attained fabulous figures No
body knows the capital that ]. P. Nor
gan & Co. can swing-oash and credit of
their own and of other peopie-but 1t IL
probably larger than either the Steel OF
Oil corporations.
| On the face of the report OF gross earn
ings ($646, 100000 the Steel corporation
realized $65.70 per ton on its finished
product Of 4. 100000 tons. Expert testi
mony agrees that about $40 per tons is q
fair average that could have been real
lied for the finished product. and on that
basis the total business of the corpora
tor was about $464 100000 instead of $685.
10000. The apparent discrepancy be-
tween the actusl volume of business done
and that officially reported is due to the
bookkeeping method OF the Steel corpora
ton In entering transactions between Its
subsidiary companies the same as though
they wero completed sales to the ulti-
mate and actual buyer. According to the
official report Of totals the $l3. 5Oo,000 net
profit for the year shows a ratio of
little over % per cent on the aggregate
volume, whereas the real figure should
be about $3.50 per cent Of profit. The
larger volume and the smaller percent
age of profit thereon looks better and
makes a better, defense In any tariff con-
troversy which might arise in which the
corporation might be accused of reaping
too hogRish protection But that may
be a purely academic and prejudiced
view to take of the case. 1t would prob
ably be SO voted by shareholders and
Wall street In these quarters there is
small care whether the Steel corporation
makes it's big dividends and adds to its
huge surplus on a gross business of $780,
600 OO or $500 600, 900, so long as the
money is available for distribution.
The copper stocks have been subjected
to considerable pressure. Stocks in
ouantty kept coming on the market on