Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-10-10
BULLS AND BEARS

NEW YORK, October 10.-The agitation
by clearing house banks to bring trust COM
panies nearer their own position within the
law requiring certain reserve against de-
posts has renewed the question OF compe-
tttion among banking institutions for de-
posfts. As long as legal restrictions are all
against the banks and In favor of trust
companies the latter will be able to pay
larger rate OF interest to depositors. as
more money can be kept In circulation than
Is possible for national banks.
Concerning this competition Of banking
institutions. the Wall Street Journal says:
1T may be admitted that up to q certain
point this competition Is healthful-so far
as It has developed new business. 30 far as
It has extended the benefits of the banking
system. so far as It has induced former
hoarders Of money to deposit It in banks
where II serves actively the purposes of
commerce. But beyond that point there is
danger. The competition has led to excess
sive payments for deposits. This results in
long train of evils. It may be admitted
that no hard and fast rule can be laid down
as regards the payment OF interest on de-
posits. Payment OF interest by savings
banks Is an entirely sound practice. espe-
cially when the rate Of interest Is regulated
stricted.
Moreover. time deposits. that is to say,
deposits which cannot be withdrawn ex-
cept on due notice being given a certain
period of time in advance, may properly
bear interest provided that interest Is SO
modsrate as to enable the institution to
make use OF the deposits profltably without
entering into hazardous speculations. A GER
tain proportion of the trust company bust
ness of this character. and it is a proper
business.
The trust company. in paying interest on
trust or time deposits. acts substantially
as investing agent for capitalists, large or
small, who do not care, at least for a time.
TO invest their money for themselves, but
when 1t comes to paying interest on de-
posits subject to withdrawal by check.
without notice, the practice Is open to the
gravest abuses. 1t Is In just this class of
deposits that the competition between banks
volving conditions which cause conservative
bankers the deepest concern"
AS practically setback or reaction in
the Iron and steel business has occurred
since the present revival started eighteen
months ago, interest is being attracted to
the possible earnings of the United States
Steel Corporation for the coming year The
last quarterly report showed so large a vol
ume of orders booked that the outlook is
for record earnings. both gross and net,
Some we'll informed and optimistic authori-
ties place the possible net earnings of the
corporation during 1906 as high as Sax. OOO-
600. This would exceed the s133, 600 600 OF
the boom year 1902 by s7,OCO,0 600. So much
has been done by the concern in the way
Of consolida ton and reduction In expenses
that this gain Is regarded as well within
the range Of possibility.
The concern has reported over 800 600 600
net earnings since the beginning of 1902
with $s5.000000 net earnings for the first
nine months of 1905. II is generally be-
heved that the end of the year will find the
no fhar
time In its history. All it's mills and fur
names will be at full capacity, and its fu-
ture business on January 1 will be the larg-
est ever booked al that period of the year
At every point 1t will be ready to turn out
iron and steel to its maximum from the
first day of the new year.
by the close of navigation in December
the corporation will have shipped from its
mines in the Lake Superior region not less
than 1S.50O,eOO tons of iron ore, as against
1O5o30S1 tons last year. Its pig iron pro-
auction OF the year will be about s.OO0,OOO
tons, compared with 1900, 421 tons in 1904.
so much prosperity and activity In trade
has been heard from dry goods sections
that many are wondering what effect the
present break In the price Of raw material
viii have on the situation. Concerning this
large New York dry goods dealer SAYS:
The break in the prices of raw cotton has
having refused to buy the raw material at
seven cents pound they went in and
bought around eleven cents. The trade Is
In excellent shape, however, and business
Is excellent. Prices are good. Our mar
gin of profit is large and the volume of
business is greater than ever. Our winter
orders are arriving in such volume that
record-breaking season is assured"
The speculative interest in American I,o-
connective common. that carried prices I'D 10
points recently. has resulted in talk of dvi-
known for some time that the earnings of
the concern has been such as to bring
about purchases of the preferred by some
of the most conservative banking interests
in the street. but the talk of dividends on
the common stock is regarded as somewhat
premature.
There Is little prospect of such step
this year. and dividend declarations in 1905
will depend largely upon general trade con-
ditions and the outlook for business
throughout the season. Thus far this year
earnings have been considerably beyond
the sanguine hopes of the directors
The annual report Of the company, re-
Gently issued. showed that nearly 10 per
cent was earned on the common stock for
the past year. before appropriating 81 $685.
557 for extraordinary improvements, after
which there was balance left for common
dividends of 1901, 600. equal to about 2ts per
cent on the common stock. The company's
report also showed that It's working capital
has been impaired 81, AIS, 900 during the ifs
cal year, which was due largely to acquir-
ing additional properties principally the
Rogers Locomotive Works