Evening star., 1912-09-08
FALL SHORT
Inactivity Has Cut Advances
to Fractions.
COPPER STOCKS HOLD FIRM
Carriers Making More Money Than
for Years, But Securities Fail
to Advance.
COPPER STOCKS HOLD Firm
By W. q. NICHOLAS.

has been no trend that anybody could
discover during the last week, and the
most competent chasers after profits
running into the fractions OF points have
confessed themselves absolutely beaten
at the game. In spite Of the inactivity of
the market, general sentiment toward
securities has continued on the whole to
be bullish. and only the professional
traders on the floor Of the exchange have
leaned toward the bear side. The facts
surrounding securities are undoubtedly
bullish. The railroad earnings that have
come to hand during the week have
made splendid showings. with one or two
exceptions. Reports from the steel CEN
ters have been not only satisfactory. but
highly flattering. and some Of the tech
nical journals devoted to the steel trade
have described the buying of finished
steel products and pig iron as "tremen-
dous"-a strong word for a technical
journal to use In describing business of
any kind. All Of these bullish influences
have led people to expect that the market
would go up. but In this expectation they
have been something like former Secre-
tary Of the Treasury Shaw and his two
hogs. the weight Of which he was wont
to dilate on in his old home in Dennison,
Iowa. with a great deal Of enthusiasm.
asked him II their weight came up to
expectations: mo, 1t didn't" said Shaw.
And I didn't think it would" While
people expect the market to go up and
confess that the facts surrounding Sc
curities warrant an advance in prices in
many cases. they will not be disappoint-
ed II 1t does not go up for a considerable
time to come.
There is probably more bullishness sur
rounding the copper stocks as a whole
report of the Copper Producers Associa-
ton. which will probably be published
next Tuesday, Is expected to show a
further decrease in the visible supply Of
copper. The general expectation Is that
the decrease will amount to 100000 or
100000 pounds OF copper, which will
bring the visible supply OF the metal in
the United States down to very close to
4O.OO0.O0O pounds-a supply Of copper
sufficient to last the present rate of con-
sumption only about week or ten days.
Exports OF copper during August were
well up to those Of previous months The
European demand for the metal, which
slackened off during July and August, is
now again In full swing, and the indica-
tions are that France and Germany will
use up an enormous supply of American
copper between now and the first of the
new year. probably breaking all previous
records in copper consumption. Produc-
ton of copper Is now going on at the rate
Of about 13O.ooo;OoO pounds a month
which is a new high record in this re-
spect. At the rate that inquiries for the
metal were made during this week. it is
evident that the consumption of the red
metal will go far ahead of the monthly
production of 13O.OOO,OOO pounds. The
metal sold freely during the week at 17A
cents a pound, and practically every sell
ing agency declares that within ten days
the price must be advanced to 1S cents
pound. Meantime. the American Brass
Company. which is the heaviest user of
copper in the United States. is in the
market for very large supply. and other
concerns like the General Electric Com
pany and the Westinghouse Company are
reported to have only enough Of the
metal on hand to last them for a few
weeks. SO that they must soon appear as
heavy purchasers.
May Be Short on Copper.
II the business revival. about which
Wall street has heard great deal dur
ing the last two or three months, finally
materializes in anything like the volume
that has been predicted, it is quite evil
dent that the copper producing mines Of
the United States cannot turn out any
where near enough copper in this electri-
cal age to supply the demand, and the
runaway copper metal market that has
been suggested may become a reality.
Certainly IS cents q pound is a very
high price for a metal that has sold
freely from 1907 until six or eight months
ago at from 12h to IA cents a pound and
all of this increase In price goes directly
into the profits of the copper producers.
such as the Amalgamated Copper Com
pany. Anaconda and Utah Copper The
Anaconda Copper Company directors
will have meeting within a fc|
days and are expected to increase the
dividend to IS cents a share quarterly,
against 80 cents now being paid. About
72 per cent of the authorized stock of
of the Anaconda Company is owned by
the Amalgamated Copper Company so
that the increase in the dividend will
go directly into the treasury Of the Anal
gamated and will warrant the directors
of the Amalgamated in raising their divi-
dend at their next meeting for dividend
purposes. These facts are the reasons
for an almost universal bullishness In
Wall street on the copper stocks. Specu-
lators who are ramping bears on the
railroad issues confess themselves to be
quite enthusiastic bulls on the coppers.
The argument on the railroad issues is
peculiar. 1t is admitted on all sides that
the railroads are now making more money
gross than for many years past and In
some cases the net earnings are increas-
ing steadily. But the low price at which
medium grade and even high grade bonds
are selling is construed into an argument
against the purchase Of railroad stocks at
this level. Anybody can get all of the
good bonds that he wants that Will yield
him from 4 to 55a per cent on his invest
ment which Is about the average yield
Of railroad stocks at current quota tons.
although some stocks yield little above
6h per cent. The argument takes the
form OF a question. which is: Why should
anybody buy a railroad stock yielding
per cent when he can buy bonds that Will
yield him Der cent? The question con-
templates q fxity of railroad dividends
under the present arrangement OF liking
railroad freight rates. The interstate
commerce commission shows a sturdy re-
sistance to allowing railroads to Increase
their freight rates. Meanwhile everything
that the railroad uses, such as iron Steel
lumber and labor. Is increasing IN cost,
while the only thing that the railroad has
for sale is maintaining fixed value un-
der the rulings of the interstate COM
rherce commission. This process if cont1n-
ued WILL OF course. preclude any sub
stantial increase in railroad dividends. and
II advances In the cost OF steel iron,
lumber, labor and capital are carried far
enough may even result in some scatter
ing dividend reductions
Situation In Money Market.
The question Of capital or money sup
ply is Just now becoming an acute one in
Wall street The advance in the rate of
the Bank of England from to per
cent a week ago set Wall street to think
ing sharply about money. The fact that
the Bank of England last advanced its
minimum discount rate from 3 to 4 per
cent in August 1907, was calculated to
give anybody who had anything to do
with Wall street in 1907 little case of