Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1912-01-30
TUESDAY,, JANUARY 80, 1912.
INERTIA UNBROkEN.

INERTIA UNeRokEN.
Inertia on the stock exchange con-
tinues sunbroken. On the one hand
security holders will not sell because
Of belief in better times ahead when
current political uncertainties, do
nestle and foreign, are over. On the
other hand buyers are holding aloot
for the better returns which pending
new issues are expected to offer This
stand!qn1 between buyers and sellers
has been further illustrated by the
attitude of large corporations in need
of funds. 1t is known that banking
houses had been holding back such
offerings for some time past, await
ing mora favorable conditions. this sit
uation being. Largely responsible for
the comparative inactivity of the in
vestment market. There Is no serious
lack of purchasing power. 1t may
be that among the smaller class OF
investors there is less money than
usual for sailing down purposes, but
there is sufficient buying capacity
among large individual and corpora
ton investors to take care Of q rea'
sonable amount: Of really desirable
offerings. There has been one other
rather important obstacle to good in
vestment buying, and that is the in
sistence of purchasers upon better re-
turns. Capital now demands larger
profits upon new ventures, an attitude
which at first seems inconsistent with
the glutted condition Of the money
market. Money, however, may be-
cheap for temporar purposes, but
when passing into fixed forms of In
vestment 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 interest or div
idends 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
assertions. Where AZ per cent used
to be an acceptable return upon high
class bonds, 5 per cent is often now
demanded. Desirable issues have been
made recently at about a s per cent
basis. It is worthy of note that in all
the new issues thus far offered little
or no stock has been offered. This
continued prepondeiance of bonds in
new issues is significant. Whether It
is q mark Of general distrust or not,
1t means piling up of fixed oblisa-
tions which@couM, not be regarded
without concern in event of any
widespread business depression.
The stock market was further I'm.
settled by the expected reduction in
St. Paul dividend. For years this stock
has been upon a per cent basis, but
it was known that last years net re-
suits did not warrant a continuance
of this rate. Union Pacific has also
been weak owing to less favorable re-
ports of earnings, the operation OF the
road having been materially dis.
turbed by labor difficulties. Devel-
opments concerning the New York,
New Haven & Hartford have also ex-
erted an unsatisfactory influence.
This property, for many years consid-
cred one of the strongest in the coun-
try, has been brought to the verge
of difficulty by the attempt to estab.
lish q practical monopoly Of traspor-
tation throughout New England, pay
ing extravagant prices for competing
properties having Indifferent earning
capacity. The steel securities were
also affected adversely by investiga.
lions at Washington, which tended to
show that the company had been maxi
ing excessive profits. Little concern
is shown about the tariff, the company
being practically Independent Of pro-
lection. The house may favor the
new bill, but the action of the SEN
ate and the president ID uncertain. |
Tho reports of slackening in de-
mand for iron and steel products also
tended to weaken values. Altogether
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