Daily capital journal. (Salem, Oregon) 1903-1919, 1904-05-28

DcgOhu bhOI fdAuS 90 W h"fNV sNN
days Of combination few and full o.
trouble.
Dividends the Only Test Of Success
1t has been for a generation regard
ed as automatic that of the earnings
of railroad system sum approach
ing one-half must be used to improve
the property and fortify its resources
against the evil day, On that prin'
ciple the Pennsylvania Railroad com
pany has won the confidence Of the
financial world, and what has been
true of II has been in a large meas
ure true also Of the well-managed
railroad properties east and west. But
a railroad system, for reasons arising
out Of the very character of its traf-
fc, is not subject to those sudden
fluctuations which are likely to beset
an ordinary Industrial enterprise. The
Midvale Steel company worked wisely
toward dividend basis for ten years
before 1t paid one. How, then, shall
these shackly creations of the market
place, with half their capitalization
representing nothing beyond the plea
sure of hope, bound by every con-
sideration of good faith to produce
dividends from the start whether the
stock represents anything or not, OBJ
serve the precautions everywhere
known to be essential for the preser-
vation of their tangible assets and for
that reinforcement of their reserve
which is required to meet the ex-
igencies of their business.
That they have not been able to do
so, or at least that theyhavenot done
SO, is shown by the fact that the aver
age sum carried to the reserve ac-
count, taking all the trusts whose re-
ports are accessible to the public, is
only 3.2 per cent of the outstanding
capital, the permanent value Of which
II is intended to secure. Andrew Car
negie did not become the ironmaster
Of the world by fixing prices and
limiting output in times of depression
He followed the fortunes of the mar.
ket place even though in the last ten
years of his business life he had to
wade through balance sheets fluctuat'
ng all the way from three to forty mil
ions of dollars.
Certain Cures Worse Than Disease.
1t is a favorite theory that the trusts
lepend for their life upon the effect
# the tariff law mitigating the pres
ure of foreign competition upon the
Industries which employ our own la
'or, and that, therefore, free trade in
rust-maje goods would kill the trusts.
confess that / do not see how any !
nan can contemplate such remedy |
Without at least grave apprehension |
hat disasters may be invited worse !
hat the disease. never hear that
imple panacea for the trusts recon.
nended without thinking OF the adver
ising card of travelling doctor, which
picked up the other day in a coun-
ry hotel. 1t reads:
o. P. Vanderman, specialist in rheu-
natism and neuralgia. A sure cure in
Is most aggravagated form.
| do not deny that free trade may
e counted upon with reasonable GER
ainty to cripple, II not to destroy,
lmost industry which It come in con-
act with. The whole world seems
o understand that, for as we enter
IpoR our Presidential campaign the
minister's of the English crown,
Weakened by the decay of the ancient
RATS of the kingdom. are preparing
N appeal to the people for revis-
on Of those sacred acts of Parliament
which In the course OF 10 years have
eft the empire commercially dismem-
'ered and the home market itself glut-
ed by the remnant sales of other
iations.
Therefore even If II could be shown
hat a trust has absorbed any given
Ield Of production, would not coun-
el my countrymen to turn that field
ver to foreign countries for the pur-
lose of exterminating that trust, for
ven II American capital has been
o managed as to forfeit the consider
.tion OF our laws, the employment
lnd Wages of the American labor
ave still their claim upon the atten.
ion and good will of our government
There Is only one sense in which |,
he protective tariff can be held re.
ponsible for the trusts. and that is.
hat without protective tariff >there
'ould have been fewer industries to
ombine and therefore fewer oombi-
ati0ns. Further than that, the pro
ective tariff has created the con-
itions that unprecedented circula.