Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1916-03-06
STOCK DECLINES
GREAT PUZZLE
To WESTER RS
Solid Men of Affairs Wonder
When Bottom viii Be
Reached Profitable Indus
trials Sell Far Below Par.

l ESPECIAL coRrtaronosHcs TO MoRsina Jousa.Ll
Chicago, March 5.--The Germans
and their friends and enemies are such
effective bears on the American stock
market that some of the most solid
men in the west are showing unaccus-
toned fear ana considering whether
there IS really any bottom to things.
Stocks that the supposedly best Judges
bought at rs a few months ago are
selling nj so, ana so large are the
holdings that these men are unwilling
10 increase their lines. Yet converse
ton with them discloses Il condition
in their business which makes for eX-
tra0rdinary value in their stocks.
one Of the Chicago companies that
has had frequent lapses in It's dividend
record in past years Is now earning s
or 20 per cent on its capital stock
irrespective of profits on a war order
which should be nearly sufficient to
cancel its entire bonded debt Officers
Of another Chicago company which
has large orders for military equip
ment state that if the United States
naval program now urged by leaders
in that service Ii carried out It will be
able to run in fun for many years.
The stocks Of both these companies
are almost entirely neglected. and of
late when there has been any change
il has boon a decline.
should BE Prosperous.
These two concerns perhaps repre-
sent fairly a majority of the companies
manufacturing munitions. They not
only have big orders from the allies,
bat their domestic trade has grown to
q tremendous total What then Is the
reason for the flattcning out of prices2
Clearly the first cause was the over
playing of the market a few months
ago--a range Of quotations which,
while theoretically justified by earn
mss, WAS so far beyond precedent that
investors were frightened and bear
operators were encouraged to make an
attack. The more recent cause is the
extreme anxiety of the country in re-
gard to our relations with European
powers. OF course, If this country
should go to war, there would be
greatly increased demand for muni-
lions, and by so much the manufacture
crs would be benefited but the posi-
biity of war shocks the ordinary ct-
zen and leads MIN to fear that all val
ues will be destroyed.
1t takes ncrvy spectators to lift a
out of such a slough as the
present one. and these spectators will
start their operations when they get
ready. They will not consult the con-
venience Of lot of longs" who have
m excessive load
An Incidental cause of depression is
the fact that some of the manufacture
ors of munitions are behind on their
contracts. This was inevitable in view
Of the fact that most of them had lit
he experience in that line of work.
one Chicago company has had to buy
D lot Of shells from another concern TO
meet its engagements, and one COM
pany that had made promises fulfilled
them only to the extent of 10 per cent
Of the total.
Puzzles Einanciers.
The "oldest inhaDitant' cannot re-
member n situation similar to the
present one. Money is loanlng at
per cent, and stocks earning from 10
10 30 per cent go begging, some of
hem far below par. This cannot last
always. Holders naturally expect that
N due time the large earnings will as
,ert themselves but those who have
hin margins will fan by the way and
here will be a great many losses
All this refers particularly to the in
lustrIal stocks, for they are'the issues
whose prices are most widely variant,
lut the railroad stocks are much af-
ected by the weakness of their indus
rial brethren. Huge quantities of
hese stocks were bought by strong
men in the west months ago in the /
confidence that there was a big profit /
coming. The income was a secondary |
consideration. Conspicuous among |
hcse purchases were the Eries, Bal |
more and Ohio and Atchson.
disappointment has como here only |
n smaller degree than in the war |
,rides.' Erie from 45 SIS to 35 is al
most as great an achievement in the |
,hnging line rs that of the war |
tocks, while Baltimore and Ohio from |
I6 to SO is something of a drop in |
lew of the dividend paid on that
took. ana Atchison dropped from |
II Ia to 101 as is entitled to some |
distinction when it is remembered
hat that stock Is now unquestionably |!
II the investment olass.
Speaking OF losses, one should not
Orpet that choice staple, wheat. The |
lazy option has sold as high MS $1.SS
IS this year, and today il is trying TO
lold itself above $l.10. on the way |
own Chicago operators have dropped
great deal of money. So astute a
nan as James \. Patton is said TO
ave lost 100000 "a 100000 Il
Perhaps it is fitting that the Euro
ean fighters who have sent prices up
o high in this country should now be
ngaged. whether Intentionally or not, 1
IA puttiufr thpp down