Evening star. [volume] (Washington, D.C.) 1854-1972, 1921-04-13
STEEL CUT |SN01
A SERIOUS FACTOR
Market Feels 1t Knows the
Worst-Leading Rails De-
veIop Weakness.

NEW YORK, April 13.--Wall street
took the announcement of the Steel
Corporations new price list very
calmly this morning. This action had
been generally expected ever since
the first of the year. The fact that it
came a week or so before the date
commonly expected made no essential
difference. Steel shares had been under
pressure yesterday and they were sold
freely for the first hour or so today.
But this selling brought about no fur
Their important weakness.
In fact, the plain Interpretation to
be placed upon the steel announcement
was that it was getting rid of a piece
of bad news which had been long
overhanging both the business situa-
ton and the stock market.
That the lower prices. given per-
haps another week or so for the trade
new orders there is little reason to
doubt. 1t is what has happened under
similar circumstances in the past.
Meanwhile the first of the quarterly
steel statements-that of the Lacka-
wanna Steel-came out this morning
the company had earned practically
nothing for dividends during the first
three months of the year
This was another unfavorable in
discounted. and it had no effect to
speak Of upon the market of the day.
Not Comparable.
The attempt to forecast the action of
Steel common, following the price cut
ting. by what happened in 1909, ig-
nored the fact that the two situations
are not at all comparable. In the
panic of 1907 Steel shares went as low
as 217s. They had rallied to $50. in
mi off
their top-namely 52-when in the
middle of February, 1909, the lower
price schedules were announced.
Therefore the fact that between
February IS and February 90 Steel
common broke some 10 points and
hung around the low level for nearly
a month thereafter is of no partic-
ular Significance for the present sit
uation, which represents not far from
the bottom in the market for steel
stocks. of 4 decline which has been
almost continuous for a year and a
half
In 1908 there was decided business
recovery, which there has not been at
any stage of the last eighteen months.
This recovery was followed by dull
spell. and it was this dizziness which
the management of the Steel Corpora
ton sought to break up by their ac-
ton in February. 1909.
No Northern Pacific Oil.
The weak spot was no longer the
steel group, but the rails. especially
some of the dividend paying issues.
For Northern Pacific there was a spe-
cific explanation for the decline.
1t was due to the shock occasioned
by the statement of the chairman of
the board, that there were no oil
properties in actual operation, and
that the companys oil possessions,
about which Wall street was so ex-
cited a few months ago. were almost
altogether mere prospects.
1t may have been the Northern Pa
cific break that was largely account
able for the unsettlement in others of
the rails. But at the same time the
railway list was undoubtedly reflect
ing some disappointment that the
Presidents suggestions for solving
the railway problem were nothing
more than the two CONGRATULATIONS,
which are in everybody's minds, that
rates must come down and that cost
of operation must be lowered.