The following text may have been generated by Optical Character Recognition, with varying degrees of accuracy. Reader beware!

WEEKLY. ] MARINE REVIEW AND MARINE RECORD. [ESTABLISHED, 1878. Eastern Office, Vol XXVIII 1023 Maritime Bldg., New York City, Chicago Office, 373 Dearborn St. CLEVELAND, O., NOV. 12, 1903. Published every Thursday at 39-41 Wade Bldg. Forei by the Marine Review Pub, Co. * ingle c Subscription $3.00 year. $4.50 year. Io cents. No. 20 Single Copy [Entered at Cleveland Post Office as second-class matter.] WHAT IS THE MATTER WITH STEEL? What is the matter with Steel? Thousands have been asking themselves that question during the past few days. Steel has been sagging steadily until now the preferred is bringing less than what was asked for the common when the corporation was formed. The price ofthe preferred is practically cut in two. Is its value equally depreciated? Steel preferred ought to be worth too cents on the dollar and as far as the layman can judge from externals it is actually worth it. There is no corporation whose tangible assets are so real as those of the Steel Corporation. Last year it transported out of its own mines 16,500,000 tons of ore. [hat is more ore than is mined in the whole of Great Brit- ain. Its control of the iron deposits is in even greater proportion. It is a conservative statement that the Steel Corporation owns two-thirds of the Lake Superior iron mines. Four-fifths of all the iron ore used in the United States comes out of the Lake Su- perior iron mines. As far as the market for raw material is con- cerned the Steel Corporation is absolutely independent. All the steel works in Great Britain put together are not as big as the Steel Corporation. As far as regards the ton-cost of steel the Steel Corporation can make it more cheaply than anyone else. Moreover, it has the biggest market in the world in which to dispose of its wares. 'There is no home market like that of the United States. It can always dispose of its surplus abroad by merely cutting under the price of the foreign producer. Then what is the matter with Steel? Why should such a security as this be literally slaughtered? Of course forced liquidation has had something to do with the decline in price. Manipulation has probably something to do also; but neither liquidation nor manipulation could provoke the wholesale distrust which char- acterizes the Steel:shares today. Is not the real base of lack of confidence in the management accentuated by the disclosures of startling financial immorality among those who were big in its: councils less than a year ago. That was a sorry mess of dirty linen that Receiver James Smith aired in his report of the United States Ship Building Co. Mr. Andrew Carnegie said that given the personnel he could in four years re-establish the Carnegie steel works. That was probably hyperbole but it was a good way of emphasizing the value of personality. What the Steel Cor- poration lacks is personality. It lacks the close, intimate, personal attention that a man gives to his private business, that devoted interest which, year in and year out, never flags. It would be ironical to say that any person is giving such attention to the affairs of the Steel Corporation. Schwab's conduct while presi- dent of the Corporation would certainly have ruined a private business. There is probably not a single big official in the Steel . Corporation who is not up to his ears in something else. There may be an exception, like Corey, but the exception always prove the rule. No man can serve two masters. No man can carry on two enterprises without slighting one or the other. When the head of a department is notoriously deficient the subordinates can- not be expected to be otherwise. It is a difficult matter to give 80 vast a body as the Steel Corporation cohesion but if all of its officials had a single purpose in life, and that purpose the care of the affairs of the Corporation, it would be better cemented than it is. Little leaks have an unhappy fashion of becoming big Ones. Inattention on the part of one man is trifling, but inatten- tion on the part of 165,000 is a mighty serious matter. There 1S NO corporation so strong as to forever withstand constant and unnecessary drains. The biggest pond will empty in time. Reck- Oning the common as a bonus the capital stock of the Steel Cor- poration can not be regarded as excessive. Its tangible assets in the common market are worth the sum of its preferred stock and bonded indebtedness; but it was unadulterated folly to dis- ' tribute $40,000,000 in dividends upon the common stock as it has done. The corporation needed that money for the transaction of its own business. It has always needed it and it needs it now more than ever. The matter with the Steel Corporation is lack of wise and judicious management. THE SHIP BUILDING SCANDAL. Probably the most charitable thing that can be said about the _ Organization of the United States Ship Building Co. is that it is the work of amateurs. No recognized authority in the financial World had anything to do with it. However, it is to be supposed that every mortal is born with a certain intuitive sense of right and wrong and it is surprising that this inherited knowledge did hot come to the rescue of some of them. It seems incredible that they should have supposed it would never be known. That poor Ompany never had the slightest chance to live. It was never tor a moment a going concern and never had any prospect of Deing such. Not one of the promoters stands as high today in € opinion of his fellowmen as he did before he went into this mpany. No man can read the report of the receiver and not eel contempt for such a breed of promoters. It is useless to deny the mischief which this exposure has caused. It has made the investing public look with suspicion upon legitimate enterprise, which, added to the general downward trend of prices, has served to unsettle industrial affairs generally. But it is to be remembered that the promoters of the ship building company do not repre- sent the sober business element of the country. The central figure was already discredited before the company was formed. It is to be hoped that the redress that Mr. Smith, the receiver, recommends, is to be obtained--that of recovery from the pro- moters and organizers of the securities which they received with- out consideration. The affair, however, is not without its les- son. It has pointed out some radical defects in the New Jersey corporation law which that state, for its own good, should amend. In the first place the details of organization should not be at- tended to by clerks in the employ of some trust company; they should be carried out by those who are responsible for the com- pany. Again there should be strict rules concerning the char- acter of the allegations in the prospectus. Assuredly it should be a truthful document. It should not be drawn deliberately to deceive as the prospectus of the ship building company apparently was, for it bore no relation to the truth whatever. A personal liability on the part of the parties most interested in floating these glittering documents would be a salutory provision. It is not likely that the country will be disgraced for some time to come with such a departure from the financial code of ethics, but if anything comes of it to safeguard the interests of stockholders in other enterprises of doubtful merit the exposure may not have been in vain. WILL INFLUENCE LAKE SHIPPING, The enlarging of the Erie canal, which now seems to be an assured fact, will, in the opinion of those who have studied the movement of freight on the great lakes for many years past, prove a great stimulus to lake shipping. It has been apparent during the past few years that grain was seeking other outlets than through the port of New York. The shipments from southern cities have been constantly increasing and those from New York as constantly decreasing. That has meant that grain has been leaving for southern coast ports by rail to the detriment of lake traffic. When the canal is completed New York will for eight, and probably nine months, in the year receive its grain by water at a rate so advantageous that southern cities cannot hope to com- pete. The completion of the Erie canal will make New York the great grain shipping port of the United States. It will also un- doubtedly check the present deflection through the St. Lawrence river channel. In its influence in establisHing a trade current, solely and singly for the benefit of the United States, no measure has been projected which is calculated to do more than the en- largement of the Erie canal. Lake men are thoroughly alive to the situation and undoubtedly by the time the canal is completed various companies will have been formed and boats built to oper- ate upon the canal. Meanwhile, of course, the present canal will be kept in commission, notwithstanding all reports to the con- trary. The act of enlargement contains the provision that the canal must be kept in commission. A 1,000-ton boat is, in these days of 20,000-ton steamers and coming 10,000-ton lake freighters, a small affair, but the time is not long since a 1,000-ton boat was a vessel of respectable dimensions. A railway train of twenty 50-ton cars can haul no more than 1,000 tons and that is a greater burden than the ordinary locomotive hauls. There can be no comparison in cost between water and railway haulage, and un- doubtedly the completion of the deepened canal will make a sub- stantial reduction in the cost of grain delivered.in New York. The whole community will benefit by that reduction. Whenever a cheap mode of transportation is substituted for a costly one the whole world becomes the gainer. When tea was $5 a pound it was the beverage of the rich; now with lessened cost it is the common beverage of mankind. It is by the cheapening of prod- ucts, and nothing cheapens them like transportation, that wealth is multiplied and comforts distributed. The enlargement of the Erie canal cannot work harm in any direction. It will even bene- fit the railways by the creation of diversified industries and the consequent multiplication of freight. The canal will never do a package business. That will belong to the railways as now, the only difference being that there will be more of it to do. It is the opinion of the New York state engineer that work upon the canal will begin next May and he hopes to see it finished in five years. With the quickened conscience of the common- wealth, and the scrutiny that the work will undergo, there will probably be little chance for corruption: and with the work divided into sections under charge of competing contractors the time limit may even be reduced. Certainly no public under- taking of recent years has attracted attention of wider interest. The whole lake region is looking forward to it.