Evening star. [volume] (Washington, D.C.) 1854-1972, 1911-01-01
statistics is the compressed story Of the

statistics is the compressed story OF the
The year 1910 started off with the
hopes of everybody keyed up to high
pitch. 1t was going to be the Tanner
year In the iron and steel industry
(Which. by the way. has maintained Its
standing an accurate barometer OIL
general business and stock market ten
dencies) 80 men in 100 looked forward
with the utmost confidence to q long
period of immense and bullying prosperity.
The mills of the country We're producing
at rate of 31,O0O.OOO tons of pig iron.
and estimates of the 1910 earnings for
the United States Steel Corporation were
variOusly placed at $lS5,OOO,OOO to $2tn.WO-
900. What has happened to knock this
hopeful program in the head probably
no ten people in the trade will agree.
The result, however. is that production
is now down to 22.OOO,0m tons year,
which is in excess Of consumption. stores
of pig having piled up to the extent Of
probably 3.W0,om tons A year ago new
plants and additions to old plants were
being constructed in all sections and in
all the iron and steel districts. Work on
these has been in large part suspended
or scaled down and capacity now in Oper-
alton does not exceed 80 per cent. Con-
sumers have drifted into condition Of
mind in which they think they cannot
lose by waiting to put in orders. Strong
companies to hold prices. They think
they will be able to do so. Consumers
very clearly think otherwise.
Crash If Prices Break.
If prices should break, the decline will
probably be more drastic than it was two
years ago. when there was an open mar
ket, and the big steel corporation gave
Independent competitors an object lesson
which will not soon be forgotten as to
what could be done in the way of cutting
prices. Whether the great producing in
terests will hang together on this propo-
sition and succeed in maintaining their
position is an issue of highest Importance
in the stock market, and the outcome
is being watched with unconcealed
anxiety. incidentally. the big steel COR
$l4O, 100000 net, instead of $2OO.OOO,OO9.
The catalogue of trouble began In Janu-
AIRY and heavy liquidation of stocks was
witnessed the very first month. railroads
breaking about 10 points and industrials
was offered for the selling, but great
mass of stocks was just naturally spilled
out. Another decline of to ) points oc-
CURED in February. March and April
witnessed a gradual recovery of about
two thirds Of the ground that had been
lost. The early part of May the market
was rather strong in tone. but as summer
approached weakness supervened.
Then game that momentous Wicker
roads from putting into effect a seventy
five-mllion dollar raise in freight rates.
This movement caught the railroads I'M
awares and was in the nature Of an ut
ter surprise. That injunction was in
reality the most important event of the
year, marketwise. But for it the rail-
roads would now be better of by $oOOO.-
600 to $SOCO,OOO a month in their earn
ings, and that might have spelled pros
perity and booming conditions instead Of
depression and lack of confidence In the
future, which is now the prevailing dis
order in the business world.
Started Slump in Prices.
This lightning bolt struck the market
situation about the LIST Of June. At that
time the average price Of railroad shares
was 1920 and the average price of indus
trials $50. BY the last week in July rail-
roads were below $1O6 and industrials be-
low $74. Several causes besides the
Wickersham injunction contributed to the
semi decentralization in June and July.
One was the attitude of lily concealed
unfriendliness shown by the representa-
tives of the all-powerful Standard Oil in
terests. This element had maintained for
a good while that the market could not be
expected to permanently improve until
the Supreme Court decided the Standard
OIL case, upon which hinged the right of
that company to do business under its
present form of organization. About this
time the mighty hunter returned from
his devastation of darkest Africa and
after d silence of seven days proceeded to
stir things up along the old familiar lines.
That gave the market jolt and still
further unsettled affairs.
Not long after the Fourth of July the
street began to hear disquieting talk OF
trouble Trouble. according to the
Wall street Interpretation. means that
somebody is in financial straits. In this
case it proved to be an ambitious syndi-
cate of English and American capitalists
headed by Messrs. Pearson and Far
quhar, who had ldaded up heavily with
Rock Island and the anthracite coal
stocks This syndicate was forced to
liquidate and before the process was CON-
pleted the lowest prices Of the year were
made in the general stock market. Union
Pacific broke to 1874. a loss on the year
of 521a Reading went to 1908. a loss o.
ass: Steel struck 61ls, almost 20 points
below the price of January ) and 33A
under the record price of last year. when
it touched 9l7s for moment. The break
might have gone further but for the
fact that Kuhn, Loeb and other bankers
came to the rescue and took over large
blocks of endangered securities. A huge
line of Rock Island thus salvaged by
Kuhn. Loeb & Co. atterward passed
into the hands of Phelps. Dodge & Co.
copper miners and railroad owners.
Sensational Recovery in July.