The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1922-05-16
MARKET SHOWS
STEEL BUYING
WAS OVERCOME
BE STUART p. WEST.
wall Street, New York, May l


--Today's stock m arket was
stronger in the start and for an
! hour or so was occupied with a
series OF upward movements main
" In the motor and copper groups.
When the terms of the exchange OF
the Bethlehem Steel-Lackawanna
steel merger was announced after
4 special ratification meeting, II
served to draw attention again to
the undoubted fact that last weeks
sneculation in the steel stocks,
incentive, had been considerably
overdone.
This is after all only Wall street
history repeating itself for in the
case of the steel corporation 81
years ago, as well as in nearly all
the other Industrial combinations,
the experience has been that the
merger valuations were overesti-
mated in the preceding speculation.
To be sure the decline in u. s.
Steel common stock from above $50
in 1901 to les than So share in
1904 was not wholly water
squeezing" process. 1t was helped
along materially by the slump in
the steel trade that became severe
in the summer of 1903 but gross
over-ca pitalization based upon ex-
cessive values placed upon constit-
uent properties was undeniably the
principal cause and it took a de-
cade or more of careful husband
ing of SURPRISES to build up def
mite equality back of Steel Corpor-
alton stocks.
Heavy selling of Bethlehem Steel
shares, apart from these consider
atoms of the past, had in view the
addition to the outstanding capital
of the company and the consequent
increase in the market supply that
will result from the merger. The
incident had a SOLDERING effect upon
the general market. Trading which
had ben fairly active at the outset
slowed down. Prices moved with
more regularity with some reac--
ton in the early objects of opera
ton for the rise.
After Mondays violent upturn,
the cotton market also slackened
its pace, while interest shifted to
vance, the significance of which it
was almost equally as rapid in the
July option, representing the first
Of the new crop months, as it was
in the May option representing the
last of the old. There were no par
ticular new factors to explain the
movement. Seemingly the thought
back of it was that the grain crop
had ben badly underestimate. The
worlds demands as compared with
supplies, during the last six months
Of the 1921 crop year, might be
making a similar mistake in calcu-
lations 70 rthe new season.
Inasmuch as the refusal of the
United States to participate in the
new Hague conference had been
quite anticipated it did not have
much effect beyond checking the
advance in the foreign exchanges.
Sterling and continental rates were
Of. Two incidents relating to the
home situation had bearing upon
the financial markets. One was a
further light shading into time
money, the other an advance in
the price OF copper metal 1A to
1895 cents per pound. There had
been reason to suspect for some
time an analogy between the cop
per metal and that in the steel
trade two months ago-a heavy in
crease in the demand finally caus-
ing concern to intending buyers
with full requirements to provide
for. Consequently today's advance
in copper was no surprise. 1t did
find reflection in larger degree of
interest in the copper and mining
stock generally. Another new high
for the year in silver and a rather
unexpected increase from to 4
per cent in the federal mining and
smelling dividends contributed to
the strength in the metal group.
There was some noticeably stroug
points among the motors shares
and here and there signs of revival
OF pool activities in specialties
were apparent. The railway shares
market plainly showed the disap-
pointment felt because the Reading
Coal Case decision was not handed
down Monday as expected.