The sun., 1903-11-09
THE SUN, MONDAY. NOVEMBER 9, 1908.

States Steel Corporation, II organized to-
day on such basis OF capitalization as is
| now represented by the market valuation
OF the United States Steel shares, could, or
could not. be said to be overcapitalized.
There Is something in the idea just sug-
gested for Wall Street to consider very
carefully. One other idea that is gradually
gaining proper recognition Is that fall
In the price Of the stocks of manufacturing
concerns due to the fact that these con-
Germs are under the necessity of selling
their products to railway companies and
other buyers at lower cost than heretofore,
Is not very strong argument for lower
prices for the stocks of the railway and
other companies which do the purchasing
under these changed circumstances and
profit thereby. And rather especially is
the force Of the argument diminished by
remembrance Of the fact that these railway
stocks have already fallen enormously
In price and that the promise Of advantage
to them from their peculiar and particular
source OF revenue, namely, the crops,
and from the prosperity OF the whole agri
cultural section, soundly established. as
never before, Is large. 1t IL by no means
attempted to be denied here that the busi-
ness watchwords that are now abroad
In our country are economy and retrench-
ment. Instead OF seeking ways to spend
money we are devising methods of saving
1t. Most keenly felt now in the eastern
portion Of the land, this tendency will in
time spread to the western part and will
eventually make its impress upon railway
earnings. What Is meant to be declared
and to be declared emphatically is that
this process Of retrenchment and economy
does not indicate, as 1t has on 80 many
similar occasions In former years, period
OF business depression. 1t is true that the
capitalization of our railways is greater than
1t used to be- and that larger sums than for
merly are required for fixed charges But
1t is also true that the greater part OF this
increased capitalization has been due to
expenditures for improvements and that
enormous sums spent upon our railways for
improvements have been taken out of gross
earnings and have not been charged to capi-
tai account at all. 1t is the belief Of the
Oldest the most conservative, the best
informed and In every way the most
sagacious railroad managers In our
country that railway net earnings in the
year 1904 will not only suffer little decrease
iToln uioec vi tno pTesSHt year py Tehson
Of the lessened financial outgo for all forms
OF operating expense and improvement and
because Of the benefits accruing from i'm
provements previously made, but owing TO
the operation OF all these forces may act
ually be enlarged. Three great factors dif-
ferentiate the present business situation
from times In past years with which par
allels are now commonly drawn. They
are, first, an absolute absence of all trou-
bles affecting the currency and the presence
Of huge volume OF money in the country,
half OF 1t In actual gold; second, the we'll
nigh total liquidation Of the debts of the
Western farming population and general
condition In the West Of financial affiuence
and social contentment; third, a foreign
trade balance very heavily in our favor.
All this does not spell 1893 or anything
like it, DANIEL F. KELLOGG.