242 



FINANCIAL REVIEW OF 1902. 



States Supreme Court against the Northern Se- 

 curities Company attracted attention, and one 

 depressing influence was the embarrassment of 

 a Western syndicate which had undertaken to 

 consolidate a group of trolley and telephone lines, 

 while another event of a somewhat discouraging 

 character was the failure of the Crude Rubber 

 Company. The floating of $30,000,000 debenture 

 bonds by the Atchison, Topeka and Santa F6 

 Railroad Company was untavorably construed, 

 and there were rumors of a large bond issue by 

 the Erie. The deplorable Park Avenue Tunnel 

 accident had an adverse influence upon the stock 

 of the New York Central Company. This was 

 followed by the announcement of an issue of 

 $35,000,000 of new stock, through which share- 

 holders would have valuable rights, and the mar- 

 ket price of the stock thereupon recovered. The 

 dividend on the Central New Jersey was in- 

 creased during the month from 5 per cent, to 8 

 per cent, per annum, and that of the New York, 

 Chicago and St. Louis second preferred from 2 

 per cent, to 3 per cent. Amalgamated Copper 

 stock recovered because of the improvement in 

 the copper situation, and the annual report of 

 the United States Steel Corporation was so favor- 

 able that it stimulated active buying of the 

 shares. The London security markets were 

 strong on rumors of peace negotiations, indicat- 

 ing a speedy ending of the war in South Africa, 

 and this news had some influence on the specu- 

 lation in American securities at the British capi- 

 tal, more or less contributing to a better tone 

 here toward the close of the month. Among the 

 important advances were Lacka wanna to 28 1J, 

 in Rock Island to 165, Chicago and North- 

 western to 16, and Metropolitan Street Rail- 

 way to 173. In February the depressing influ- 

 ences on the market were the phenomenally bad 

 weather conditions between the 17th and the 

 28th, and also the effort of the Commissioner 

 of Internal Revenue to enforce a ruling taxing 

 collateral deposited as security for loans. The 

 United States Supreme Court adjourned on the 

 3d, having failed to announce a decision in the 

 matter of the application of the State of Minne- 

 sota for leave to file a bill of complaint against 

 the Northern Securities Company, and therefore 

 it was felt that the intended suit would not be 

 pressed. Interest in the matter was revived, 

 however, by the action of President Roosevelt, 

 who, on the 19th, directed the Attorney-General 

 to bring suit against the company on the ground 

 that it existed in defiance of the antitrust law 

 of 1890. Though the Supreme Court on the 24th 

 rendered a decision denying the application of 

 the State of Minnesota, the above-noted action by 

 the President had an unsettling effect, because 

 it was seen that if the Northern Securities Com- 

 pany had violated the provisions of the act of 

 1890 there were other concerns which were simi- 

 larly situated. There was a severe fall in prices 

 of stocks on the exchange on the 20th, but this 

 was followed by an irregular recovery, and the 

 market was generally strong thereafter, though 

 the trading was comparatively small. 



Labor troubles were the prominent features in 

 March, and the most serious was the strike of 

 freight-handlers at Boston. A lockout was 

 threatened by the cotton manufacturers at New 

 Bedford, Mass., but the differences with the em- 

 ployees were compromised. The United Mine 

 Workers in the anthracite coal regions of Penn- 

 sylvania demanded an eight-hour working day, 

 but through the mediation of the National Civic 

 Federation a strike was averted. The bill of 

 complaint in the action brought by the United 



States Government against the Northern Securi- 

 ties Company was filed in the circuit court for 

 the District of Minnesota on the 10th, but this 

 attracted little attention. There was some anx- 

 iety felt respecting the prospects for winter 

 wheat, owing to long-continued drought in the 

 Southwest, until copious rains tended to relieve 

 apprehensions. Notwithstanding the above-noted 

 unsettling features the tendency of the stock 

 market was generally upward, and closing prices 

 showed improvements compared with the lowest 

 of the month; one of the notable events was an 

 increase in the dividend on Southern Railway 

 preferred to the basis of 5 per cent, per annum. 

 A prominent feature in April was a partial 

 corner in Louisville and Nashville. This was 

 brought about through the sale by the company 

 of 50,000 shares ot new stock, the issue of 

 which had been authorized in 1893. The sale 

 was made, however, before the new stock had 

 been listed on the Stock Exchange, and, tak- 

 ing advantage of this fact, John W. Gates 

 bought largely of the stock, intending to squeeze 

 the short interest, but, in order to effect this 

 purpose, he \vas obliged to buy more than he 

 could conveniently carry. He had secured con- 

 trol of the property, and if he forced a corner 

 he would place himself in the embarrassing posi- 

 tion of being technically short of his own stock. 

 He extricated himself from this position by turn- 

 ing over his control to J. P. Morgan & Co. When 

 it was seen that a corner was threatened the 

 whole market became unsettled, but after the 

 impending danger had been averted there was a 

 decided recovery in the entire list influenced 

 by speculative manipulation on a large scale. 

 Among the notable advances were Chicago and 

 Northwestern common from 232 to 271, Illinois 

 Central 141J to 153|, Nashville, Chattanooga and 

 St. Louis 89i to 122, and Michigan Central 150 

 to 192; Louisville and Nashville rose during Mr. 

 Gates's operations from 105J to 133. The quar- 

 terly dividend on Amalgamated Copper was re- 

 duced this month to \ of 1 per cent., and that on 

 Calumet and Hecla was also lowered. The 

 United States Steel Corporation announced its 

 intention to issue $250,000,000 of new bonds for 

 the purpose of retiring with $200,000,000 of the 

 issue a corresponding amount of preferred stock 

 and converting the remainder of the bond emis- 

 sion into cash. The Rock Island obtained 

 control of the Choctaw, Oklahoma and Gulf 

 Railroad, and the Atlantic Coast Line acquired 

 control of the Savannah, Florida and Western, 

 or the Plant system of roads. One event early 

 in May was the collapse of what were known 

 as the Webb-Meyer securities, involving the fail- 

 ure of three Stock-Exchange firms. There had 

 been wild speculation in these properties, the 

 result of manipulation, and the collapse was 

 brought about through a sharp break on the 

 curb market on the last day in April in Inter- 

 national Power stock from 198 to 120. This at- 

 tracted attention to Dominion Securities, Hack- 

 ensack Meadow, Storage Power, and North Amer- 

 ican Lumber and Pulp because of the supposed, 

 connection of the Webb-Meyer syndicate with In- 

 ternational Power. The market was again unset 

 tied, after it had partially recovered from tho 

 effect of the above-noted failures, by the decisim. 

 of the United Mine Workers on May 15 to strike, 

 they having failed to obtain any concession from 

 the anthracite-coal operators. Gradually, how- 

 ever, the market recovered, influenced in part by 

 the restoration of normal monetary conditions, 

 which had been deranged by the Webb-Meyer 

 troubles, and the tone was steady for the re- 





