New-York tribune., 1916-01-31
REVIEW OF THE
FINANCIAL WEEK
u. s. Steel Dividend Fails
as Market Stimulant-
Stocks Lower.
BONDS HELPED BY
STATE OFFERING
Coming Labor Dispute Shadows
( the Railroads - Foreign
Trade Totals Great.

.
be excited through renewed and in
creased disbursements. When this hope
] failed of fulfilment stocks were offered
freely and prices weakened. Confidence
in the present position OF bonds shown
! in the taking over of the S25,oOO,OoO
! Of 4 per cent bonds issued by the
State of New York by private investors
at a yield of less than 3's per cen'
helped bonds. but did little for stocks.
1t may be that, in spite of the specu-
lative excesses seen in the war stocks
the security purchasing public is more
discriminating than IT has been IN for
mer years. The war, with It's IN
heaval of traditions and its apparent
/ disregard for precedents, may na'c
brought an unusual sense OF cau'ioh'
Whatever the cause, OUTSIDE puylhE
which Wall Street has been LOOKING ior
to take over stocks and reduce the our-
den ii collateral loans here did not
appear.
when il is recalled how IN former
times shrewd operators have met news
DEVELOPMENTS with such market re
sponse as they wished 70 create. II seems
as if large interests are for the pres
ont not particularly anxious 10 bring
in tho nublic. On Wednesday morn
ing. after overnight announcement OF
the record breaking earnings OF the
Steel CORPORATION and resumption or
the > per cent dividend on common
stock. traders rushed 10 repurchase TO
cover their short commitments. Prices
+ iumred and buying orders could 1t ap-
reared. have easily carried on the rise
so as TO create an appearance o.
strength that might well have been TO-
lowed by the public purchasing II
stimulated. Instead. stocks were sup
piled I'm such volume as to check the
advance and send prices lower on the
day.
There is. it must be remembered:
much cause for caution in this time OF
war. The results Of military cam
paigns have been most disappointing
TO the Allies. The process OF wearing
down Germany through the blockade
is proving a long and difficult one. The
cost 10 all the belligerents is stagger-
ing. Actual outright purchasing OF
sound securities is needed II We are
to take back our stocks and bonds from
the other side and help finance foreign
nations. Reckless speculation IN stocks
is another matter.
[. 5. Steel's Great Earnings.
The Steel Corporations earnings for
the quarter Of over SOL 100000 more
/ than met the markets expectation.
/ From month TO month the total con-
/ tinued TO advance, as It had since the
| first of the wear. December was the best
month in the history of the company
and the quarter was some S0,OOO.OOO
3 above the best previous record. Orders
ahead, IL is known. are unusually large.
Business this year viii be more and
more on the basis of higher prices es-
! tablshed and there IS every eXpecta-
tion that these records set at the close
o. 1915 will be surpassed.
The dividend disbursement sill
leaves a great amount 10 be carried 10
surplus. and continuation of such profit
able business should put the company
m excellent shape TO meet whatever re-
adjustments may be necessary when the
demands of war. so largely responsible
for these great profits, are at an end.
Prices. according TO trade authorities.
show no sign of discontinuing their up
ward movement. and demand both for
foreign and domestic purposes Is still
large Railroad buying is not great and
large orders from this source are not
Immediately looked for.
During the week earnings statements
of the more important carriers came TO
hand and repeated the brilliant showing
of the two months preceding. Traffic
/ handled did not bring in such immense
| revenues as in November, but gains IN
gross and net over former years gave
proof that the railroads were sharing
in the prosperity of the country. The
market effect of these wonderful earn
ings was lost through fear of the COM
ing demands Of railroad engineers, fire
men, conductors and trainmen through
out the country for shorter working
days and higher wages, and through
foreign selling.
No Railroad Strike Expected.
As usual at the start OF such CON
troversy. there was talk that arbitration
would not be accepted. Railroad man
agements started a publicity campaign
TO present their side of the case and
brought before the market the possibil-
itv. that a country strike might
result The last two years have seen
mach that has been considered incon-
ceivable, but such an interruption of
traffic can hardly be supposed to be
within the realm of probability.
Z Yet arbitration, the natural outcome,
seemed far from satisfactory. There
is no rule for conducting such settle
ments of labor disputes other than per
suading each side TO make concessions.
The unions. recognizing tins method
Of procedure. make their demands with
this in view, and the result Is practi-
Cally always an Increase in labor's
share Of the proceeds. The railroads
have just begun to recover from An
unusual period of depression. Com
modify prices have risen and their sup
plies cost them more. Held down by
state and national regulation rs they
are. they cannot Immediately raise the
rates they charge TO correspond TO the
/ higher level of general prices and OF
wages Increased rates may come If
they are forced TO pay their men more;
but the history of rate regulation here
shows that such increases are slow and
W certain.
In the business depression that pre-.
coded the war and continued for some
time after its outbreak there was no
general liquidation Of labor. Union
wage scales as rule were maintained.
! ne Id-lIOhuS SAW lnclT weaker MEM
bers dcfaultlng interest on bonds and
reducing or suspending dividend pay
ments. and all were unable TO carry
the usual amounts to surplus. At the
same time there was no general lower
ing Of the basis on which employees
were paid. Railroad capital now is
making up its losses. but railroad labor
did not suffer in the same way during
bad times.
Staie Rnnd Sale's Succcss