The morning news. [volume] (Savannah, Ga.) 1887-1900, 1894-09-10
BANKER oLEws' VIEWS.
The Financial Outlook as Seen From
Wall Street.

/ III 9NAGENa
New York. Sept. s.-The general out
look is interpreted as favoring a contin-
uance Of the present symptoms of recov-
cry. Everywhere, there is a scarcity of
goods; and the current Unprecedentedly
low scale of prices encourages buying.
Alter twelve months contraction Of pur-
chases alike by traders and consumers, a
considerable replenishment Of supplies
: seems inevitable. The buying may be
conservative and consumption may posi-
Oily run largely upon the lower grades Of
goods; but. in any case, the machinery Of
/ business has now received new impetus,
( ana Jnere is no reason why it should not
steadily recover it's accustomes move
ment. 1t may be that the recovery in the in
I dustrIes-Or some of them-will somewhat
lag behind the movement in commercial
operations; for there is reason to fear that
/ manufacturers are con tending against the
dlmculty of an excess of plant. and for
| tnaJ reason they may lind ground for
| complaint until their capacity Tor prOduc-
! ton be- ONES better ad US ed TO the de-
mand for products. To reach that ad-
: Justment, there must be on the one side
an Increase in the Buying ability of con-
sumers, and, on the other, the permanent
dlsuse of plant which has failed 10 keep
I pace with the march of economy in pro
ductiOn. For these and other reasons, we
may not be warranted in expecting any
immediate boom" in trade; but we may
legltlmately anticipate the wholesome
| process Of recovery that comes from re-
vision OF the conditions of production and
distribution. Such a revision is calcu-
lated to encourage confidence in invest
ments and, il it fails TO in duce expansion
IN industrial outlays, it TO the same ex-
tent encourages investment ia already ex-
listing securities.
The general situation of investments
| seems to favor steady rise in the value
OF railroad securities. From causes con-
nected with the excess of manufacturing
plant above referred 10. there may
very possibly be, for some time TO come, a
check upon the flow of new capital into
the industries. The tendency of the mo-
ment, indeed, is rather toward the con-
solldation of the several separate capitals
or important trades into single great
monopoly, for controlling thei effects of
excessive production and consequent com
petition This, for the moment at least,
directly tends TO divert the increasing
wealth of the country from the industrial
uses and forces it into other forms of in
vestment. Railroads are the more calcu-
lated TO attract this diverted capital be-
cause they are becoming less and less ex-
posed to competition from the creation of
new companieswand the construction of
new lines. Experiences improving their
methods of operation; public opin-
ion is enforcing upon them greater
integrity of management; the current
! wholesale reorganization of large COM
panies is not only wedding out the weak
spots in their finances but also exhibiting
the necessity for more conservative capt
tall alton and stricter acCouuta blility
of managers; while the decline in the cost
of supplies and in wages is conducive to
greater economy of operation. These
facts should make railroad stocks and
bonds more acceptable to those who, for
the time being, find some other forms of
corporate Investment surrounded by
doubts arising from unsettled industrial
conditions. For this reason we expect to
find the values of railroad securities
steadily sustained by a growing invest
ment demand, and regard them as a good
purchase whether on speculation or for
permanent holding.
The gross earnings of railroads con-
tinue to make increasingly favora ole COM
parsons with this period of last year,
when The depression of business had not
produced its full effect upon transporta-
tion and when earnings were swelled by
the worlds fair. For the four weeks of
June some SeventY-hve to eighty lines
showed decline, averaging about 20 per
cent from 1898; and, owing to the Debs
strike. the decrease for the first week of
July was over 81 per cent. From that
date to the third week of July
the decline diminished to 12.40 per cent.
showing the effect of the breaking up of
the strike; and, for the last week of that
month, the decrease was less than 2 per
cent. August opened with a merely frac-
tional falling off; and the third week of
that month showed an increase over last
year of 80 per cent. 1t is to be noted,
however, that August of 1898 showed a
decline of IL per cent. as compared with
1882; but the traffic of that month two
years ago was large beyond all precedent.
Under all the circumstances, therefore.
the current drift of earnings must be re-
garded as assuring.