The Hattiesburg news., 1912-01-30
Henry Clews' Letter

New York, Jan. 3O.-Epertia on tho
o oYock Exchange continues unbro,an %
ra. u '"e one hand security holders will
nr,o So" because of belief in better
NJ. oNeau when current political
Uncertainties, domestic and foreign
over On the other hand buvers
t.s. 'iuins aloof for the better re-
'Uin us which pending new issues aro
''eu TO offer. This stand-off he-
s "eeu buyers and sellers has been
,ur'her illustrated by the attitude 90
large corporations in need of funds
" Nno"h that banking houses had
I've" ioidlng back such offerings for
'"ne time past awaiting more favor
"0'e conditions, this situation beine
largely responsible for the compara.
1--WE inactivity of the investment mar
Ne'' There is no serious lack of mr.
'""s'ug power. 1t may be that
''uohg the smaller class of investors
'Hefe is less money than usual for
sailing down purposes. but there is
sufficient wing capacity among
large indiyiA al and corporations in.
'es'ors to take care ol a reasonable
amount of really desirable offerings.
here has been one other rather i'm
.o't ui obstacle To- good investment
'oF'Hs, Hrd that Is the mststance OF
purchasers upon better returns. Cap
''' now demands larger profits upon
new ventures, an attitude which at
first sight seems inconsistent with
The glutted condition Of the money
market Money however, may be
cheap for temporary purposes, but
when passing into fixed forms of in
yestment requires and seems able to
secure better returns. Capital also
wants larger profits. because those
with fixed incomes are compelled to
secure higher rates Of iterest or divi-
dends in order to meet the increased
cost of living. This week several new
bond issues of importance have been
made at rates which prove such as
Sertions. Where l-2 per cent used
TO he an acceptable return upon high
class bonds, ) per cent is often now
demanded. Desirable issues have
been made recently at about a per
cent basis. 1t is worthy of note that
in all the new issues thus far offered
little or no stock has been offered.
This continued preponderance of
bonds in new issues is significant.
Whether it is a mark of general dis
Trust or not, it means a piling up of
fixed obligations which could not be
regarded without concern in event of
my widespread business depression.
The stock market was further un-
o''led by the expected reduction in
St Paul dividend. For years this
stock has been upon a Z per cent
basis, but it was known that last
years net results did not warrant a
continuance at this rate. Union Pa
fr hes also been weak. owing to
less favorable reports of earnings,
0Na operation Of the road having been
materially disturbed by labor difficult
ties. Developments concerning the
New York. New Haven & Hartford
have also eXerted an unsatisfactory
influence. This property, for many
Years considered one of the strongest
r the country, has been brought to
the verge of difficulty by the attempt
10 establish a practical monopoly of
transportation throughout New Eng
land paying eXtravagant prices for
competing properties and finding it.
self saddled with rundown proper
ties having Indifferent earning capaci-
~. The Steel securities were also
affected adversely by Investigations at
Washington, which tended to show
that the company had been making
...-ooeeiva nrOfitS Little concern is