Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-10-14
Financial News Letter
By W. G. NICHOLAS.

NEW YORK. October 3.-The near-at-
hand stock market situation is undenably
strong The sharp corners have been
turned and the outlook as well as going
conditions all foreshadow higher pr ces.
Some of the unusually cautious are await
ing the count of the ballots three weeks
hence before taking a fixed market posi-
ton but this element is in the minority.
Most people have lost fear of Hearst VIC
tory at the polls and feel that they can
safely dismiss from their m nds apprehen-
sions of political revolution. at least this
year of our Lord. Money is working easier
and business conditions are everywhere de-
scribed as satisfactory. Excepting in spe-
cial cases and for special causes holders
are hanging on TO their stocks and if any
thing, increasing their lines. Not that the
public Is in the market. for IL isn't, but
stubborn investment class has bought on
the conviction that values will work higher.
and they cannot be shaken from that posi-
ton by anything short of financial earth
quake. This gives to the market back
ground soldity that resists the utmost ef-
forts of bears and raiders for more than
point or two. The market may De largely
a traders affair for the next two or three
weeks but there is nothing in sight to In
dicats important react on from prevailing
prices At the same time those on the
lookout for thrills are likely to be sap
general uplift are present and continually
at work.
The theory upon which many railroads
embarked on heavy expenditures for recon.
struction and general betterment was that
improved facil ties would result In decreas-
ed relative cost OF operation. In few cases
has the theory worked true An immense
increase in the volume OF business Is noted.
but the reports of operation fail to show
the expected saving In the cost Of handling
1t. Everything that goes into the makeup
of a railroad and its conduct costs more
than 1t did under the old order or Things.
with the single important exception OF steel
Is Rolling stock and labor In every de-
partment come higher than formerly, and
the tendency is still upward 1t Is true that
all over the country net earn ngs show
gratifying increases but the percentage to
gross very rarely shows reduction On
the other hand. there Is a tendency on the
part Of the public to demand lower treisnt
and passenger rates. a feenng wnch Is
taking form In some states in az tation Tor
legislative action. The sent ment In TINS
direct on was recognized by the directors OF
the Atchison railroad in refusing to In
crease dividends until western legislatures
adjourned next spring. Mr. hartman
act on In lifting the dividends OF Union
Pacific to 10 per cent Is peing severely
criticised on that account
It thus transpires that railroad manage
rents look forward into the future with
deep concern. They are not carried on
their feet by present prosperity; splendid
Inevitable relaxation from xisting high
pressure takes place and there is falling
off In tonnage 1t Will be imposs bic to
economize at once In corresponding meas
ure. Wages have been gradually moving
inward during the last seven years. and
thew cannot be ruthlessly or harshly cut
with sweeping gesture. Net earnings W II
be the arst to feel the change. and the hurt
must be quite severe before there can be
Important reduction In operation to suit
curtatled Income. Labor Is the most Sc
rious question Immediately confronting
railroads Already sw tchmen on many
In wages and when they gain their point.
as seems likely they will. every other class
of employees vii! go IN for raise. The oc-
currence Of the San Francisco earthquake
preyented q general movement for an ad-
vance In railroad wage scale last spring;
NEXT spriug win almost certa My witness
agitation on the subject. Everywhere the
pressure Is toward increased cost OF raj
road maintenance and operation and LOT
pairing down revenues. knowledge OF TINS
Situation makes the thoughtful and con-
snonsibie for their management hes tate 10
indorse the policy OF too free Distribution
~ earnings which cursory glance al cur
rent financial reports might seem Tor the
,no,.,ent to Justify. Rather would hey lay
aside something against a rainy da5.
Some very clever and effective work IS n
proeress on the New York curb and on the
Boston and Pittsburg markets in the shares
of mining companies. Many of the propo-
these mediums have unauestioned merit,
hut in several cases the properties upon
which the stock is issued are nothing more