The sun. [volume] (New York [N.Y.]) 1833-1916, 1902-12-08
TIE FINANCIAL SITUATION.

ReStlOn oil railroad IhlS CouBCr'ioh
has. in fact. been extremely acute only in
and around the city OF Pittsburg. The ef-
forts of the entire Pennsylvania Railroad
system were at last directed toward settle
ment Of the trouble and they we're success
full. Il develops, however. that the Penn
sylvania and many other railroads now need
trackage facilities more than they do equip
ment and that big item OF expenditure in
this direction is facing them. The Pennsyl-
vania IL about to expend $40 900 900 In cut -oh
lines and similar construction in the Pitts
burg region; and the statement OF the Penn
| sylvania'a earnings for October throws light
on one other sub jet that in greatly interest
ing railroad men at present. namely. the
tendency Of expenses 10 eat up gross reve-
nue.. The Pennsylvania lines east OF Pitts
burg showed a gross increase in earnings
for October OF little over 81 0O0O 600. but
operating expenses increased 1851 900, leav-
ing only trifing net surplus just now all
business, more or less. in congested, and
congestion il always unhealthy The way
TO end IL and cure it is to reduce pressure.
which in the business world means to reduce
prices. Lower prices for commodities.
when brought about in this way, are far
from portending anything serious or dis
astrous. Rather should they be welcomed
a. natural and beneficial occurrences. This
is philosophy which concerns the world Of
iron and steel. perhaps. just nov more than
il does the railroads. The tende ncy Of iron
and steel prices is downward; and every
body ought TO he glad Of II. A domestic
consumption that has been stimulated to
such feverish activity that il requires not
only the entire vast output OF our own
mills to feed II. but absorbs the surplus
product of England and Germany az we'll,
needs to slackcn Every intelligent interest
In the iron and steel trade realizes that prices
are too high, and that they ought to fall to
level which would. at least bar importations
of foreign goods Had II not been for the
conservative policyofthe United States Steel
Corporation a runaway market In iron and
steel would have long ago started and would
probably now be collapsing with shock
that would shake the country.
The money question is still troubling the
stock market and will probably continue to
do so. Gold exports are only averted
with difficulty. Money does not return
from the West and the strong suspicion
Ia that the demands for help from the un-
wieldy real estate speculation that grew
up in the summer in the West and North
| west and Canada has more 10 do with the
failure Of the return movement Of money
TO begin than is commonly supposed
The extraordinary shipments of funds
TO San Francisco are also said to be
partly due to a real estate boom on the
Pacific Coast which stands in need Of sup
port Commission houses have greatly
reduced their loans and are now carrying
la. La,. Lat
is the strength Of the situation. But syn
dicates have not reduced their loans and
they are probably carrying more stocks
than they were. The banks have been
forced to increase their loans so as TO pro-
vide funds to take up the stocks sold by
Europe. That Is the weakness OF the stu
alton. The usual buying in the shape Of
investing in anticipation Of the release
Of dividends and interest on Jan. 1, Is not
yet in evidence. Spectators, therefore.
may he readily pardoned for an unwilling
ness to buy stocks until they can see the
end Of a dull and sagging market and until
they can feel some assurance, moreover,
| that that dull and sagging market has no
| unpleasant surprises in store.
The Secretary Of the Treasury's annual
report TO Congress and the recommended
tions Of the committee Of our own Cham
Der of Commerce regarding currency re-
form were the important financial events last
week. Had this been the first revelation Of
the radical and extreme views entertained
by the Governments chief financial officer
as TO the desirabiity Of new laws affecting
banking and currency and concerning the
reading of laws already in existence, Mr..
Shaw's report would have created a sensa-
ton. A. it was no very great attention
was paid to II except In some fearful Stock
Exchange circles, where the apprehension
| was Of bad effect Of the Secretarys pro-
nunciamen,o upon our European creditors.
Mr., Shaw's suggestion that the Secretary
Of the Treasury Of the United States should
be allowed to deposit the public funds
| in banks throughout the country without
any security whatever and AT such rate OF
| interest as he sees fit. is away in advance
| of any proposition Of the kind ever before
made; while his declaration in favor of an
| asset currency entirely unprotected by tie
safeguard Of first lien upon the assets Of a
note-issuing institution is likewise an anon.
ally in the asset currency agitation. To most
of the recommendations of the Chamber of
Commerce committee there will be decided
| popular assent, 10 some OF the recommended
| tons there will be dissent, equally decided.
Every one realiz'S that the law limit q the
retirement of bank circulat ion to 81. go 600
a month is obsolete and harmful, and
should be repealed. There is small profit
now in bank circulation; and the
chief reason why banks now hesitate 10
add to their circulation when money be-
comes scarce is that they may be forced
to keep out the circulation so long that
even the small profit in it will disappear.
and il will become a source Of actual ex-
pense Similarly, every intelligent person
would approve the enactment of laws
specifically providing for the interchange
ability Of gold and silver in our country.
and permitting the deposit of customs
revenues In national bank repositories
| direct. The object of the requirement
that customs revenues should be paid in
gold and paid directly into the Treasury.
was, of course, TO secure TO the Government
beyond peradventure gold for the security
Of its bondholders. The necessity for
this has long since passed. Neither will
there he any weighty objection to the
| deposit Of all the Government money