

The Hardwood Record 



VOL. XVI. 



SATURDAY, APRIL 25. 1903. 



No. 1 



The Bardwood Record. 



PUBLISHED BY 



C. V. KIMBALL, 



ON THE lOTH AND 2STH OF EACH MONTH. 

 134 MONROE STREET, - CHICAGO, ILL. 



ENTERED AT CHICAGO POST OFFICE AS 

 SECOND-CLASS MATTER. 



TERMS OF subscription: 



U.S., Canada and Mexico $1.00 per year. 



Foreign Countries 2.00 per year. 



ADVERTISING RATES ON APPLICATION. 



The cost ol advertising in tlie Wanted and For Sale 

 columns will be found at the liead of that department. 



ADVERTISING INDEX ON PAGE 26. 



Contributions on subjects of interest 

 to lumbermen are invited from any 

 person. Subscribers and others arc re- 

 quested to notify us of changes in per- 

 sonnel or organizations of hardwood 

 lumber firms. We desire especially to 

 receive particulars of installation of 

 new plants, transfers of property and 

 timber holdings and experiments in 

 new methods of manufacturing or the 

 utilization of by-products. New publi- 

 cations of interest to the trade, including 

 catalogues, stock lists and circulars will 

 receive attention if sent to this office. 

 Our columns are also available for 

 criticism and comment on any article 

 published or for news of any sort con- 

 cerning the hardwood trade. 



Our readers will confer a favor when 

 writing to advertisers if they will state 

 that they saw the advertisement in the 

 Hardwood Record. This is little 

 trouble and costs nothing, but it helps 

 us and is information wanted by the 

 advertiser. 



THE BUSINESS SITUATION. 



Reports from all sections iudloate that 

 the general business of the country Is in a 

 flourishing condition. Factories are run- 

 ning full time on orders taken at profitable 

 prices: railroads have more business than 

 they can handle; such agricultural prod- 

 ui-ts as are coming to market are bringing 

 handsome prices; people who work for 

 wages are abundantly employotl and well 

 paid wages, and so far as legitimate busi- 

 ness is concerned conditions could scarcely 

 be better. 



All of which establishes prosperity ujaon 

 so solid a foundation that it will be very 

 difficult to unsettle it for some time to 

 come. 



But any position less sound than that oc- 

 ruiiied tiy legitimate business interests to- 

 day would certainly be affected by the arti- 

 licial condition existing in those financial 

 circles of which Wall Street Is the center, 

 which condition is brought about by the 

 craze for promotion and consolidation 

 among the gigantic stock gamblers of the 

 country. 



During the three years of 1900, 1001 and 

 1902 there were capital Issues added to the 

 lists of the stock exchanges of the country 

 in excess of the enormous amount of 414 

 billions of dollars. How much of this 

 enormous increase rejiresents actual value 

 in increased mileage or equipment of rail- 

 roads, or increased capacity in manufac- 

 turing plants, it is impossible to determine 

 but no large percentage probably. 



I'lir every mile of new road or dollar 

 of new equipment added to a railroad, that 

 road is entitled to that much additional 

 credit, against which it may legitimately 

 issue credit obligations. 



Such a road may also legitimately issue 

 credit obligation against the increased 

 earnings of the' road, due to our present 

 l)(>riod of prosperity. Such issues are not 

 as sound as those based on an increase in 

 tangible assets, but they are legitimate. 



Rut with all such issues accounted for. 

 we fear that much of the 41/2 billions would 

 still remain, having no more substantial 

 basis than the hopes of the promoters for 

 increased prottts to accrue from establish- 

 ing a monopoly of the carrying trade 

 through certain territory. 



For instance, when the Morgan-llill syn- 

 dicate decided to buy the Burlington sys- 

 tem, the stock of the Burlington was 

 ■ Hioted at about 165, and such trading as 

 was being done was around that figure. 

 I'liat KJ.'i represented the tru<' value of the 



stock, based upon its earning capacity in 

 a period of exceptional prosperity, and un- 

 der careful, able and economical manage- 

 ment. 



To have gone into the open market in an 

 .If tempt to buy a controlling interest would 

 have excited competition in the bidding, 

 which would have run the price to ruin- 

 ously high figures, so. It is said on good 

 authority, the syndicate made a private 

 deal whereby a controlling interest was se- 

 sured at 200. In other words, in order to 

 carry forward their scheme of consolida- 

 tion they paid an advance of 20 per cent 

 over the actual value of the property. To 

 compensate themselves, saying nothing of 

 making a profit, it will be necessary that 

 they, through establishing a monopoly of 

 the cari-ying trade throughout the North- 

 -west, add 20 per cent to the earnings of the 

 road. E\'erything depends on their getting 

 into position where they can force the pub- 

 lic to pa-y 20 per cent higher freight 

 charges. Happily, the courts have so far 

 lilocked their efforts in this direction. 



This attempt of the ilorgan-Hill syndi- 

 cate is u.sed, not as a special or unusual 

 sample of the methods of the new tribe of 

 promoters, but as a fair illustration of 

 what is going on all about us. 



All sorts of properties are being Ixiught 

 at prices above their worth, even under the 

 present excessive prosperity, and being 

 mergtHi into trusts and pools whose only 

 lirospect for a profit lies, not in a contin- 

 \iance of the present era of prosperity, for 

 that would not be enough, but in a vast 

 increase over the present prosperity, which 

 would enable the consumer to pay an added 

 profit of from 20 to 50 per cent on their 

 wares. 



These syndicates and <'oml)inations rep- 

 resent an immense amount of wealth, and 

 through J. P. Morgan & Co. they have a 

 central organization which enables them 

 to act in unison ; but it is the belief of con- 

 servative men that they have overloaded 

 themselves. The general investing public 

 is refusing to touch their inflated securi- 

 ties, and they are, in a very lar.ge degree, 

 still in the hands of those who Issued 

 them. They are a powerful group of finan- 

 ciers, but there is a limit to their capacity, 

 and it is the belief that that limit has been 

 reached. 



This manipulation, this buying and sell- 

 ing, issuing and reissuing of stocks and 

 bonds must not, however, be confounded 

 with the real business of the country. 

 Sticli manipulation adds nothing to the 



