The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1904-01-16
The Business World.

Some disappointment is felt in finan-
cial circles concerning the first rail-
road reports Of the new year. Thru
the fall and early winter, the roads,,
under general conditions less favor
able, made better showings and
earned gross sums somewhat larger
than in corresponding periods Of the
year previous. This they have been
able to do even up to date, but the
percentage of increase has been grow
ing smaller until, in the first week of
the year, it was down close to the van
ishing point.
For a long time it has been i'm
even ratio of increase between earn
ings and operating expenses. Results
are shown in the final reports for
November last, but recently COM
pleted, covering twenty-five lines, that
earned an excess of $1,233,469 over
the November previous, against which
operating expenses were $2,312,9O1
greater, leaving a net decrease of
$1,079,432. Hence in the face of a
gross increase of only 90 per cent in
the earnings Of the thirty-six roads
for the first week of January, ii
is futile to look for anything very
gratifying in net returns of the imme-
diate future.
1t is a financial axiom that railroad
earnings faithfully reflect general con-
ditions. = They are an index Of the
present or of the immediate past. But
as a guide to the future they are OF
tie value :s.'.- F.. e...,..i ~
Wall street and the railroads might
be likened to two great Indicators, the
one pointing ahead and the other
| backward. Wall street in it's opera
| ton anticipates, rushes in to discount
and foreshadows the coming Of any
| change. The railroads reflect the
change and show much of the effect
The beginning of the great rise in
Wall street that came in with the cleo
ton of Mckinley indicated the exist
ence Of a widespread, overpowerinr
feeling of confidence, an assurance OF
great good things to come. Pros
perity came, in degree equal to al
anticipation. When the wave was al
| it's height, Wall street had long since
embraced it's every opportunity, hac
pressed it's every advantage to the ut
most, and had discounted it. over anC
over. There followed a long period
Of steadily increasing railroad earn.
ings, indicative of great activity the
country over, financially, commercial.
ly, industrially, proving that the pros
perity was genuine.
| Next came a season of Wall street
excuses, wild imitation and financial
debauchery, eliminating in a sensa.
tionaI corner. A waiting period mex
land then the great decline, continuing
for months and spending it's full force
only when values had been forced tc
| low points scarcely dreamed of, anC
pessimism had become the order OF
the day.
| Thru this tremendous decline the
railroads at first held up, but showings
were less encouraging on the side OF
net results, and the statements of to.
day are the reflections of conditions
less favorable, the coming of which
the great stock declines foreshadowed
! A few months Of comparatively un.
favorable railroad reports may rea-
sonably be expected. To suppose thai
because the great rise in stocks was
followed by several years of continued
increases in railroad earnings, the de.
cline means a like period of decreases
is to be utterly at fault. The decline il
stocks represented not only the ole
Wall street tendency to get in line
with changing conditions to come, but
in much greater part the desire tc
stand from under, the knowledge that
speculation had been carried tt
heights Of folly unprecedented anc
that great fall had to come entirely
aside from good or bad business con.
ditions over the country as a whole.
The long talked Of recession ~ir
business is here, and If its effects are
no more serious than shown at pres.
ent the country will be none the worse
| for it, and will be a gamer in the
long run. But he who takes the rail.
road reports as guide, and bases
his opinions upon Them will find him.
self following behind the times, for
i while the reports, rejecting periods
just past, will be unfavorable, condi.
tons will be changing for the better
and there will be other signs to indi.
cate the coming of Improvement.
To-day there is much heard of the
laying off of railroad.men and of the
reduction of working time of others
Yet simultaneously the industrial sit
uation, which affects all railroads. i.
changing for the better, thousands O.
men are returning to work, and it i:
/ good opinion that in the. great iror
| and steel trade low point has beer