High in High in
Stock July, 1901 July, 1902
Amalgamated 124¼ 68¾
American Smelting 58 47½
American Sugar 145⅝ 134½
Anaconda 48⅞ 27
Col. Fuel & Iron. 116⅛ 102¼
National Lead 23 22¼
Tenn. Coal & Iron 72½ 69½
Rubber 21¼ 17
U. S. Steel 48⅞ 41
U. S. Steel, Pfd. 99½ 92⅛
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Average price 75.80 62.18
“These tables show that during the fiscal year used, railroad stocks
advanced an average of over 15 points, while industrials declined
almost 14 points. In other words, the spread was 29 points. The man who
bought rails and sold industrials would have made on the average 29
points. This exhibit entirely overthrows any argument that the market
moves one way or the other homogeneously.
“There was a reason for the spread illustrated above. There always is
a reason. We had big crops in 1902, which helped the railroads. The
industrials, on the other hand, were busily discounting the business
depression of 1903.
“Precedent shows that in a period of general depression Industrial
stocks suffer about 33% more than rails. That is to say, in the high
and low prices covering a long period, industrial securities should
show a distinctly greater pro-rata of decline. Let me illustrate, using
the stocks employed in the former table and covering the period of our
last great cycle, 1901-02-03. As most of the high prices in rails were
made in 1902, the highest prices of both 1901 and 1902 will be used,
and the lowest of 1903: