The Birmingham age-herald., 1911-10-22
WALL STREET DOES EXCITING TALKING Market Has Held Up Fairly
 We'll PRESSURE ON STEEL Move Taken to Abrogate Ore Con- tract Caused Much Surprise. Indicates Another Change Aa
 of Front
By w. G. NICHOLAS


 By w. c. NICHOLAS
 New York. october 21.-(Special.)-W street hasn't had much to do this week and for that reason has indulged itself in excited discussion over politics, Tobacco trust dissolution intrigue, the retreat of the Steel trust from its position of de- f1ance to government authority and to many other things of more or less acad- efnic character. There have been times during the week when the market looked awful sick and when it seemed as though the bottom was going to fall out. Some how or other the various crises were passed without anything serious happen ing and net price changes have not been very important. Indeed, some of the sea soned dividend payers hold their good repute with investors and have actually advanced in the face of a tremendously bearish professional sentiment in Wall street. Representatives of some of the leading interests are still possessed of the idea that the country will go to pot unless the government and the politicians get off the back of "big business" They refuse positively to take the view that the great industrial and railroad combina- tions can be dissolved Or radically read justed without producing business chaos and throwing the country into prolonged period of distress. They maintain this attitude with great persistency and point to existing distrust and lack of confidence as proof of the correctness of their theory.
 Market pressure has canterad 1arpaIv upon the Steel issues. Primarily, that is because of the unsatisfactory state of the steel trade. and partly because of the new development In the affairs of the United States Steel corporation as ar- nounced in it's declaration of purpose to surrender its control of the great iron ore bodies leased from the Great North ern Railroad company. Undoubtedly the milling capacity of the iron industry is kept fairly busy but the product that is now coming from the plants represents about as thin margin of profits as at anytime in 15 years. This condition bears down hardest on the independents, some of which are said to be doing business at an actual loss, they having become tied up in contracts for future delivery on terms that are banning out unproftably. As mentioned repeatedly in these letters, the independents with only one or two ex- captions are at a disadvantage of $2 to s6 a ton in competition with the trust. For the most part they are burdened with heavy fixed charges and at existing low prices for products they are already ex- periencing the pinch of seriously hard times. Should the business depression continue for another year, which many sare. now predicting, not a. few of these -in- dependents may have to go into the hands Of receivers. Tt would be fnVidious now to m point the finger to these concerns or to be a c fn hrrf ITO 11olf tya yaH and their condition broadly discussed. In several cases the question of dispensing with dividends on preferred issues is be- ing canvassed as one of the strong prob abilities of the next few months.
 It is common belief that the banking and speculative combination that came to the rescue of the market and saved it from demoralization three or four weeks ago by buying huge blocks of Steel com- mon, has worked out of the stocks taken on at that time It is still giving support to Steel and other stocks that are grouped around 1t as prime favortes in the stock market. Not that exuberant kind of sup port that gives the impression of a boom being engineered from behind the scenes, but rather of the stubborn sort suggest ing desire to stand by position taken rather than an attempt to mark up prices to higher levels. At the same time, how ever, it must be admitted that the pub- lie is in the market on much moro extensive scale than it is given credit for being. The 51a to per cent which is now obtainable on many reasonably safe in vestments is attracting people with money. Large sums are finding their way from Repositories where small or no in- terest is paid, into stocks that yield ex- ' cel1ent returns at current quotations. It Is this kind of investment that Is i'm proving the backbone of the market and al i'm ,-+ fdc Of fessionals and the liquidation of timid holders. Not that prices may not go low CT, but 1t Is far from being a friend- less or discredited proposition. It is be- coming more theatre for action in spe- cialities, however, and a disposition is manifest to apply the acid test to in- dividual properties rather than to accept them in general groupings, as heretofore.
 The move taken by the Steel trust in announcing 1t intended to abrogate the lease for Great Northern's ore deposits was a good deal of surprise. It indi- .cates another change of front on the part of MT. Morgans big combine and a de- sire to avoid conflict with the govern ment. although only few weeks ago the king of high finance shook his fist at the administration, figuratively speaking. and declared that the trust would resist all effort to move it from its position. It may be-, however, that in yielding to the governments half declared intention to bring the trust to time the big steel com hine Is also getting out of a bad bargain. Expert opinion has been divided from the very first as to whether the trust hadn't rot in bad in it's dicker with Mir Hill for those iron mines MT. Hill is notori- ously a hard trader and it was current belief that he had outgeneraled Gary, Prick, Morgan. Perkins and their asso- ,. ciates on the Steel board, in securing an exorbitant royalty for the Northern Pa cif1c. At any rate, the trust w.T get rid of the payment of millions of dol lars annually for ores it really does not need and 1t will be putting itself again on friendly terms with the government at Washington Mir. Hill, on his part, will recover possession of his 30O.oOO, 900 tons ore deposits and will be looking about for a new customer. Iron ore un- der ground is not a particularly valuable asset in pancky times. It is about as useless at such periods as sandstone quarry in the middle of the Rocky noun