The sun., 1903-11-23
THE FINANCIAL SITUATION.

Governments publication OF the enormous
figures Of our foreign trade for October
and by reaction in the popular mind
against the grosa and stock jobbing false
hoods circulated concerning the affairs OF
the Pennsylvania Railroad Company and
other leading corporations. was Gcgtely
responsible. Back of all this. however,
was a renewal OF confidence that there
would be plenty of money at hand in the
near future for Wall Street to buy stocks
with II it wanted to do so and deeper
conviction as to the soundnees OF general
business prospects The bear contingent
had overdone its business-that WAS very
obvious. The stories about great railroad
and business interests engaged in smashing
each others securities OH the Stock En-
change, for no apparent reason save motives
of retaliation and jealousy. became finally
too frequent and too thin. This alone
would have sufficed to give US higher prices
for stocks. But broader forces were ct
work. Analyses of the asset, and liabilities
Of this and that stock corporation were be-
coming common, with the result in very
many instances Of the discovery that there
was startling disparity between the
low current prices Of securities and the
high actual value OF the property repre-
sented by them. Some proper measure
Of appreciation began to be paid to the
fact that the farmers Of the land had re-
ceived more money from their crops this
year than eve before in their history
and that we had had. not simply one, but
six years of great agricultural pros
perity. More and more emphasis was,
righteously, laid upon the truth that. what
ever abatement in business activity might
await the country in the coming year, our
great railroad systems had prepared them
selves for it during the vsIy prosperous
years that had begun in 1893 by lavish
and absolutely unprecedented expenditure
Of money for improvements. Had 1t not
been for this expenditure, had not our rail-
road managers insisted upon putting their
roads into the best possible condition when
the opportunity presented itself. the rail-
roads of the land could, in the past three
years at least, have distributed twice as
much money in dividends as they did, and
that this distribution was not made was,
as every one knows. a mighty grievance
at the time to Wall Street speculat DTS,
People began 70 reflect that it was not at all
unlikely that the time had arrived when
the stockholders in railroad companies
would reap the reward OF the forbearance
and sagacity of their managers and that,
even assuming that railroad gross earnings
would fall OF in 1904, the reasonable prob
ability was that railroad net earnings for
the year would remain constant or would
even increase. II long for a year or so Of
hard times" said the president OF one Of
our great railroad systems upon which
expenditures for lower grades and similar
improvement work have been particularly
heavy, so that my road ca n show what it
can do
Another thought, too, is beginning to
secure the prominence and WELD the in
fuence that it deserves to. Much has been
said by way of adverse criticism upon the
general situation concerning the large rail-
way bond issues that have recently been
made. But what, chiefly have these bond
issues accomplished? The direct benefits
conferred by them in the way of betterment
of railroad properties are really OF secondary
advantage; their primary importance has
been that they have prevented the building
of competitive railroad lines in our coun-
try after the disastrous fashion of twenty
years ago, What was the one cause Of tho
railway receiverships that followed the
boom" of the sos? 1t was. as every school,
boy knows, the vast overbuilding of rail-
way lines into new territory, practically all
of the new lines being competitors. What
would have been the result II those in charge
of our railway interests had, in 1898, when
it became clear that the trackage and equip
ment of their concerns we're inadequate
to take care Of the vast business that offered,
adopted the policy of spending little OF no
money in enlarging existing capacities?
One result, and one only, would have oc-
CURED, the building of new and rival rail-
way lines just as In former years.
Developments in the course Of the week,
such as the final settlement Of the Sea-
board Air Line matter. tho practical wind
ing up of the affairs of the United States
Steel Corporations bond conversion
syndicate and the bestirring of certain
prominent directors Of the United States
Realty Company in the way Of internal
reform Of their organization, we're all
helpful. The Seaboard Air Line matter has
all along been more of a menace to the mar
ket than has bee n popularity known. Tho
trouble about 1t was STAYED of but only
STAYED OF, not remedied, last August and
the trouble has been again growing acute.
From railway point of view the Seaboard
Air Line was in position to make rates on a
great variety of products-such as, for in
stance, on iron from Birmingham to Rich
mond-that would be very disturbing to it's
sister lines. The Seaboard Air Line has
now, as a cause Of annoyance in the railway
world. vanished, for which thanks are due
principally to Mr.. Thomas F. Ryan There
is now for the first time complete harmony
between railway interests in the South; and
nowhere will the ending of the matter be
more gladly welcomed than in the city Of
Baltimore, where it will greatly assist in the
smoothing out of many difficulties. The
cessation Of the Steel syndicate's opera
tions means in an immediate Wall Street
sense that no more Steel sinking fund bonds
will press upon the market and that the
more or less artificial character OF the mar
ket for United States Steel securities which
has for some months existed has passed
away. There has been no financial matter
in years that has been the subject OF such
general misapprehension and unmerited
animadversion as the work OF this syndicate
When the Steel Corporations bond con-
version plan was inaugurated the profit
aocruing to the syndicate that took charge
of the affair. as represented in the then
existing difference of two points between