Ashland tidings. [volume] (Ashland, Or.) 1876-1919, 1913-07-14
INDUSTRIAL SECURITIES.
(Seventh in Series.l

eAA sAAoAA tAAAAN HoptAs 90 "NAA 90 NOAAA
mon and preferred stocks. This ap-
plies to all industrial securities, in
Guiding railroads. The affect is al
ready apparent in the falling prices
of some of them. We have before us
the report of the congressional COM
mittee which investigated the concen-
tration and control of money. Set
out therein are the methods used by
Wall street interests in establishing
the price of industrial stocks and
the plans forwarded in unloading
them on the people at these prices.
In other words, the processes of
watering are made plain, and the
plans of the interests in setting a
price at which the public can absorb
them is set forth so clearly it be-
comes at once apparent that the large
initiation in many of them is purely
artificial. Many of these securities
have been sold by New York finan-
cial institutions to individuals and
country banks. AS conditions become
better understood there is a growing
feeling of unrest and a desire to get
from under before the market
breaks. AS the facts brought out by
the congressional investigating COM
mittee are more widely disseminated,
and the proposed new currency law
more fully understood, the securities
market will receive a distinct shock
because those holding industrials will
feel the break coming and hurry to
unload When the crash comes it
will be sure and swift, and the dan
ger lies in the probability that Wall
street will feel it first and refuse to
reabsorb securities which it has al
ready placed in the hands of country
investors. The testimony before the
investigating committee shows con-
clusively that such securities are
much inflated. The general knowl-
SuSC Vi Illio ldSI CtlllOuS lllNc0lOIS, lO-
gether with tariff reduction; the new
currency regulation proposing to de-
! stroy Wall street control of money
and credits; and the government reg
ulation, or attempted disruption oi
trust monopolization, will greatly
augment the panicky condition, max.
ing it harder for trust organizations
to maintain their high rates of prof.
its and pay interest and principal or
Indebtedness as it falls due.
The writer is no alarmist, but il
is good business to look facts in the
face and trim accordingly.
We know of one bank whose pol
icy had been to carry its surplus il
eastern commercial paper, recent!
to unload all such investments anC
replace them with municipal securi
ties. Just how far this policy main,
tains among financial institutions We
do not know, but it is certain thai
the demand determines largely the
interest value of industrial securities
and as the demand falls no doubt the
price will go down. To illustrate the
tendency already apparent Prior tc
three years ago packing industry pa.
per was considered the cream. II
brought par on an interest basis oi
four and one-half per cent. That
same paper with February last ma.
turity had to carry interest at six
per cent to make it bring par. Be-
cause meat packing industrials rank
high among those which will be af-
fected by trust-busting operations by
the government, it may be fairly pre-
dicted that it's next February paper
will be hard to float at much high
er rate.
The business of these large con-
Germs is financed largely by thus OBJ
tanning funds on short time paper
BY this plan, for instance, the pack
ing houses are enabled to carry large
quantities of dressed meats in cold
storage, ready for immediate de-
mand, and it has been even limited
that they have done so for the sole
purpose of so regulating the supply
as to maintain high prices. What
ever the motive, if the free importa-
ton of meats as provided in the I'm
derwood tariff very materially re.
duces the price of it, the packing
houses may be found with large
supply of high-priced beef on their
hands, thus jeopardizing the security
on their bonds, stocks and CONNER.
cial paper. Again, if Mr. Wilson's
administration succeeds in establish
ing competition. where before only
monopoly existed, and the good re
suits to the consumer are as grear
as anticipated, the loss will reflec
directly on the manufacturers. Ii
case 1t was their habit to have out
standing abnormal issues of time Of
demand paper, well enough secured
by present earnings, the result woulC
follow that unless the volume of pa
per was reduced as fast nc tha nrofit,