New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1912-09-15
Standard Oil Profits.

divorce. and look for more money.
Standard Oil Profits.
..o,d. Of warning to those who in
A.,uo,rately follow Standard Oh securi-
,n their rising prices expecting still
W. agures to be reached, by Gilbert
v1lott SEQ. specialists. Following is a
Ter sent out by this firm:
p s;nos tbe dissolution Of the Standard
-, Company in December last, approx
.,n,v 100000 900 has been added to the
~" ".set value of the stocks Of the thirty
n u.s.. segregated companies. Except for
..ronaratively trivial reaction in April,
s.nouing the sale Of an unusual number
:, subsidiaries zen bloc" the rise has
-, continuous. The market price of
.be equivalent Of the old stock zen
s,o,r having nearly doubled in nine
months.
conservatism would seem TO demand
.o,A inquiry into the causes for such
- extraordinary advance. following the
S,ssolution Of an organization which was
Generally believed to derive one Of its
cbi.f elements of success from the CO.
fornity OF policies
practically the only material factor OF
favorable importance that has occurred
srcs the dissolution has been the advance
N nrices of crude petroleum and of its
various refined and manufactured prod
urls II must be conceded, IL is true, that
this is a factor of first Importance, but as
IA whether the advance is to. be main
,aned and continued is question for the
future TO determine. IL must be borne in
mind also that only a comparatively
small proportion OF the crude oil produc-
lion. is directly owned by Standard Oil
subsidiary companies, and that therefore
tbelt chief profits must be derived, as in
the past. by increasing the margin be-
tween the cost of crude oil and the price
of the refined products. and the wider
this margin the greater will be the en-
coursgement 10 outside competition,
Contrlbutory 10 the rise in oil prices, it
is said. has been the attitude Of Standard
on interests following the discontinuance
OF government attacks. The Importance
Of this factor for the increase in stock
values is, of course, rather problematical.
since II is hard to believe that govern
mental prosecution, which has always
s4en part OF the Standards routine bust |
ness should have prevented these COM |
uanies from increasing their earning |
rover on the vast scale indicated by the |
advance in their stocks.
ON the other hand, the restoration OF |
competition, the object sought by the |
government, though perhaps only tech |
meal now. might at any time become |
real If the prices of some OF the COM /
Ianles' stocks advanced sufficiently and |
the market We're broad enough to tempt
some of the larger holders TO sell.
Many Of these issues have been bought |
By PEOPLE solely for the purpose of par
iicipatiug IN the rise, and these purchases |
constitute an element of weakness in the |
market for they will later be liquidatcd |
either at profit or at a loss.
Considering the Factors.
wagner Dickerson & Co.. in their weekly
market review say in part:
At the end of last week the resources |
Of twenty-siX local banks were below the /
required reserve, as compared with hIteeh |
the previous week, and large losses on |
Sub-lreasuTy operations nave contlhGeu;
Naturally, there has been talk Oh goa
imports. and Secretary MacNeagh eX-
presses himself as willing 10 furnish |
Treasury aid IL required 10 iaclhtate
marketing OF the crops; put THESE are
emergency measures. GoId imports
would not normally develop in volume
ri the present time; and the Treasury /
deposits with the banks are often pre-
ceded by market declines. Stocks, there
fore, must wait on the money market, |
except where individual issues nave
warrant for special appreciation. In the
period September i TO December 70
the local banks lost in net. on all move
ments, l2,lsl,WC in 1911, $e3. IN 1911
and 100000 in 1909. They are con-
fronting a parallel prospect with the
smallest surplus at this time for hVe
years past
One factor which may have consider
able market importance is that last year
the banks purchased an unprecedented
quantity Of shOrt-term notes and bonds I
because OF inability TO secure desirable
commercial paper at satisfactory rates, /
ana have these for sale in unusual guam
Wy now that trade demand for money
70 brisk. Liquidation of this nature has
see1 factor In depressing high-srade
ponos TO about 1907 prices, and II Is pos
y this direction to obiviate extensive
sflHng OF stocks, which remain largely
nhinarketed and 81 the hands OF strong
interests whose customary prohts. are
yet 10 De secured. IL should be noted in
Passpg that the English bank reserve
mas Improved from $50 per cent TO GO@
per cent, although this is below the per-
SSthlage shown at this time for the past
The extraordinarily favorable conditions
e revealed by the government crop report
lhls week must be assigned first place In
~ STUDY OF general condition and the
ssuohs statistical report made by the
copper Producers Association, taken with
NE large increase OF untitled tonnage re-
ported by United States Steel, bringing
'rdefs booked 20 equivalent OF six
h9nths production. supply conspicuous
iNIdence OF the continued industrial prog
,slroad earnings for the first week Of
, sla, are available, and sufficient
Iahlc 10 continue the record OF gross in
'eases Is nanifestly assured.
Railroads Good Prospects.
The railroad situation in brief Is re-
'leyed by Haden, Stone & Co., in their
seekly letter as follows
We showed last week the increase I'm
ross earnings made by a number OF the
Eastern railroads for July, and the week
efore showed the increase made by the
Western railroads. For the Eastern roads
dyen the increase in gross earnings av-
RACED se per cent and the increase for
he Western railroads averaged Ill per
eht These increases are the largest
made at any time during the five years
ince 1907, and, inasmuch as August is
howing fully as large an increase as
uly. we think 1t is fair to state. as we
i'd last week. that the railroads have
Irned the corner, after two years of
depression. and. barring the
nexpected, are likely TO enjoy period