New-York tribune., 1906-11-12

serves. Loans can be reduced without upsetting
the general markets, and the chances are that
drastic contraction I'm the loan accounts of the
banks would serve to promote rather than injure
the prospects for higher quotations In stocks
later on in the season. The loans of the New
York banks well secured the collateral be-
Ing of the highest grade representing Industrial
and railroad companies which are making tre-
mendous earnings and which promise to
tinue prosperous for years TO come. If there
should be a great reaction in the business world.
if conditions should develop which would upset
the intrinsic value of investment securities and
if foreign owners of American stocks and bonds
should become alarmed over the position of af-
fairs in this country. then the large loan
counts of the banks in the United States would
become a distinct menace. and liquidation would
result which would unsettle the financial situa
ton and bring bout serious trouble in all fnan-
cial quarters. There is, however no indication
of the development of factors of this character;
indeed all signs point to increasing strength In
the conditions underlying national prosper
ity. Borrowers will be compelled TO pay stiff
rates for accommodation in the rest of the year.
but the people who depend upon the banks
for loans making large profits in their busi-
ness. the high price of money is not such great
hardship ordinarily supposed. but it is easy
to figure out, however. the probability Of trouble
if rates should move to a much higher level and
If assistance should not be extended by the gov
ernment The Bank of England in its return
last week showed Improvement, but there Is
little chance of a reduction from the per cent
level established two weeks ago until easier
money develops in the United States.
Reports received from all trade centres are
extremely encouraging in most lines of business.
the only unfavorable features being increasing
demands of labor for higher pay and the high
cost of living which has been brought about by
the advance in about every article needed by
consumers Yet the high prices have not les
sened the demand. and there appears to be no
chance Of a change in this respect in the near
future. Foundry pig iron is selling at SO ton,
compared with $40 80 at this time a year ago;
Besemer is selling at so So, against SIS IS last
year. and about the only item in the iron and
steel market which does not show an advance is
steel rails which are quoted at S2S a ton, this
being the level established two years ago.
which has been maintained by all manufact-
urers with no idea their part of making a
higher figure Outside of steel rails the ten
dency toward higher prices is pronounced. an in
dicaton of which is presented in the course of
foundry No. . pig iron, which was quoted last
week 81 % above the price of the preceding
per cent of the entire advance recorded IN the
last year. It is thought that pig iron prices in
the rest of November and in December may
range from 81 TO So more than the current quo
tations. The price of coke, also. will be higher.
Foundry coke is bringing high as 81
ton. The high prices for railroad supplies. the
demands for better wages among railroad
ployes which are being made in many cases, nota-
bly, on the Pennsylvania. suggest the probability
of higher railroad rates in 1907, and this nat
urally is not pleasing prospect for the ship
pers, but it is one, however, which will have TO
be accepted unless there shall be a general de-
cline in the price of materials and reduction in
the cost of labor Economies by the railroads
may be possible to extent, but the enor-
nous obligations which have been assumed
by the railroads in the last year in the way of in
creased dividends increased capitalizations
and increased wages. together with increased
general costs Of transportation will undoubtedly
action will renew agitation against the railroads
and possibly cause considerable trouble between
the companies and the Interstate Commerce
Commission. The Pennsylvania Railroad alone
will pay out next year an additional S12 600 900
| on wage account, while it also. through it's re-
| cent increase in its dividend rate will give to
T stockholders S3051,91O more than it has paid in
| 1906. The widespread dividend increases. which
| as rule are being made large stock issues
is not altogether favorable factor for the
companies. and in many conservative circles IL
is believed that the matter is being overdone
and that il will react seriously upon our railroad
and industrial concerns.