Evening star., 1923-06-13
STOCKS co LOWER
|NF|NAL TRADING
Advance on New York Gen.
!; trail Dividend Report Is
Quickly Checked.
ny STUART p. WEST.
,nsci,IDispstch to The star.

Special DIspatch 10 me star.
NEW YORK. June 13.-The New
York Central dividend action was the
absorbing point of interest in today
stock market.
On few occasions in Wall street
history had so little intimation of the
result been given on the stock tape.
Less than half an hour before the
news came out New York Central
stock was selling at 99A. The whole
street practically, taking their cue
from this, had abandoned hope OF a
declaration at the rate of per cent
The majority were looking for siX'
while quite number felt that the
dividend would be maintained on
per cent basis.
When il was definitely announced
that the rate had been raised TO =
there was a violent turnabout IN the
entire market. In few minutes
Central stock bounded up to Tvs
Other rails jumped point 10
points.
Advance StoFs Suddenly.
There was rush to cover indus,
been active during the first hour. This
outburst quickly subsidized. but while
it lasted it was quite the most spec
tacular thing that has happened in
the market for a long while.
The statement given out by the
New York Central directors explain
ing their action was very impressive.
1t had been realized all along that the
main object in increasing the rate TO
: per cent would be to encourage the
exchange of the per cent debenture
bonds and prepare the ground for fu-
rather than through enlargement OF
the funded debt. But il had scarcely
been appreciated that paying per
cent on New York Central shares
would make the return upon the com
pany's entire capitalization only o.O'
ner cent this because of the eXcep-
tfonaIly low rates of interest on the
long-term bonds
Tne conservatism of the present ac-
ton is brought out by the statemen
that since 1914 New York Central
surplus has risen from s29.ta6,000 To
si12 5S1 900 and that during this pc
riod the company had been paying
per cent on its stock at times wher
it was costing more than this 10 DOR
row money.
Financial Review and Outlook.
Increase in the New York Central
dividend from a TO per cent basis
was unquestionably the important in
cdent in the financial situation TO-DAY
1t failed however, to more than mo-
nlentarilr halt the selling mo"emen,
on the stock exchange. which nae
started Monday afternoon ana con-
tinued through Tuesdays session.
Very naturally, this action of the
market raised the misgivings which
Wall Street had felt month ago as
to whether the business outlook was
really as good as it was declared &c
be by leading trade representatives
and as II Is made to appear IN mos'
of the commercial data.
Further readjustment In the OH
trade is admitted to be nece essaTy. IL
is also clear that predictions made
four months ago of what these OIL
companies would earn during the
year were absurdly optimistic. Blu;
shares are down in many cases 20 to
so points from where they were sell
ing early in March.
Rig Steel Consumption.
The midweek reviews of the stee
in activity at the steel mills. The
Steel Corporation is operating TO
per cent less than it was at the peak
IN May. But even at go per cent oi
capacity mills operations are un-
usually high. and the falling of is
only what normally occurs at the be-
ginning of hot weather and at time
when the farmers are bidding against
the manufacturers in the labor
market. The most significant part Of
the Iron Age summary in its refer
enCe to the moderate reduction re-
ported last Saturday in the steel oCr-
poration's untitled tonnage, which, the
review says, "is another index OF the
great volume of current steel con-
sumption"