The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1907-01-24
United States Railways Need 70
Improve That Much
over BILLION ALREADY BoRRgw[D
GREAT SYSTEMS FLOAT STOCK
ISSUES WITH LAVISH
REckLEssNEss.

A~GN IO1sAA' fOAA' =
conditions have undergone little
change and the situation remains per-
picking. in spite Of very satisfactory
conditions outside of the stock market.
There is no gainsaying the fact that
the undertone of the market is weak,
and that, notwithstanding frequent
rallies, encouraged by those having
stocks to sell and by the develop
ment of an increasing short interest,
the prevailing tendency of the market
is downwards.
From the long distance point of
view, it is difficult to see how this
could be otherwise. There is alto
gether too much truth in the recent
assertion of Mr.. ]. ]. Hill that the rail-
road facilities of the country are total
! ly inadequate for present requirements.
Mr. Hill is authority for the state
ment that Aemrican railroads will
need $5,5OO,0OO,0OO spent upon them
during the next five years. This is
at the rate of $1,1O0, 100000 per year.
Quite singularly enough, this latter
sum nearly equals the amount already
| issued or intended to be issued during
the current year; since figures have
been published which show the
amounts recently authorized and is
sued to have reached about 81 900 OO0,
! 900.
Various Stock Issues.
This week Northwest announced
stock issue of $25,G00,000. Chesapeake,
| & Ohio is expected to shortly come
| into the market with an important is
| sue of short time notes, one of the
| favorte means of raising railroad cap
! ital under present adverse conditions.
Another report is that Southern Rail-
way will shortly arrange for $4,000
! 900 of new capital AtchisOn is said
| to be in need of $50.000,000; while
Erie New York Central, New York.
| New Haven & Hartford, Lehigh VAL
| ley, Seaboard Air Line, Pittsburg &
| Lake Erie. Canadian >Pacific, Great
, Northern and other roads all promise
heavy demands for new capital. Add
| ed to such requests are those coming
from some of our big industrial con-
Germs. Among sucn are American
| Wooden company, American Telephone
and Telegraph, the Mackay companies,
| National Carbon company and many
| others. 1t will thus be seen that we
| have to face some very unusual de-
mands for new capital from strong
concerns with imperative necessities
| behind them; and these will be enforc
! ed at the expense of weaker concerns
if necessary.
| Hard to Avoid High Rates.
What is to be the effect of such
demands upon already congested mon
ey and stock markets? With an un-
der supply in the former and an over
supply in the later, it seems impossible
/ to avoid continued periodical high
rates for money and lower prices for
| securities. The inevitable law of sup
ply and demand in the long run is
bound to assert itself, Notwithstanding
the manipulations of some of the most
powerful and ablest cliques which this
market-or even the world-has ever
seen. Securities are still largely CEN
! traliZed in the hands of a few power
full men. Unquestionably these parties
| will resist the natural tendency of the
market. and resort to every available
method for distributing IA least por-
| ton of their surplus holdings before
| yielding. For this purpose it would
create no surprise if money rates were
! order to foster bullish speculation.
! These parties. however. have not only
| to contend against natural causes, but
! they also have to take into cOnsidera-
ton the present indisposition of both
investrs and spectators to buy stocks
at high figures, especially when they
yield such relatively unsatisfactory
returns compared with ordinary inter-
est rates. Investors and Independent
banking concerns fully realize what
will be the ultimate effect upon mar
ket values of the mass of new securi-
| ties now hanging upon an already over
| supplied market They recognize, too,
that many of the railroads are begin
ming to labor under adverse influ-
ences, so far as net earnings are con-
| cerned. Quite a number Of our rail-
roads have enlarged their dividends,
and the question is, will they be able
to maintain all of these increases.
Obligations are being rapidly multi
piled, as in the case of Pennsylvania,
where the tremendous increase in cap
ital is out Of all proportion to the
| growth of earnings in the past ten
years. At the same time costs of op-
Grating have risen rapidly, owing to
the advances in labor and raw mater
| ials, which will very materially curtail
profits in 1907.
Great Contests Approaching.
| We are thus rapidly approaching a
period when the market will witness
| contest between the natural influ-
ences of supply and demand on the