Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1907-12-14
Eastern View Of Its Effect on
The Money Market in
General
soN0s WERE HARD TO FLOAT


.NH|I.'
earlier than uaaal l.rFe nu"hi
mon employed u construction W1r'
calls attention again DOB fhr pf'i..n 20
RAILWAY rcuancam -sf which hf at
tr.ct.d discussion since Nc.3 o1rlI 30
tbo velr sass ihc Boston Transcript
Those who regarded the recent acton
OFF ia. Union Pacific lines. PcnnsyiNa
mia. aud ott.r barge systems as new
development iu tho situation ta'i.t d
recall the days of last Fcbruaty. lrio
TO the first bad break in the STOCK mar
Fct when the same subject was N-Il
mucb i'm the minds of large financial in
terests ana action already taken h'
leading systems had foreshado"e,
rruch of what has since taken plac'
Tho signs were plainly visible Thai
railroads which had laid ont ambitious
plans for extensions douhie-tracHins
and expensive construction work ol
various securities necessary to Huauc,
them. unless at ulnoua prices. Tho
bid for capital 90 finance st. Pau.
Pacific coast extension had come only
in the nick OF umc Great Northern
new stock issue was delayed hy legal
obstacles very nearly 90 the limit Of
safety: and proposed convertible bond
issues by Pcnnsylvani3 ani Atchison
were taken as bad omcus by the MAR
kct which - months before would have
regarded amy such announcements as
good naWs
FIRST RETRENCHMENT.
Moved 10y this obvious indisposition
OF the market toward anything rosem-
bling new stock issues. and by the inn
possibility OF finding % market for bonds
even at sharply advanced Interest rates.
the railroads speedily took u SAIL
whatever improvements were consider
cd strictly necessary were hnr"'"' H'fh
ISSUES OF short-term notes. or by In
creased expenditure from earnings, u4I
other work was called on. The New
York Central inaugurated this policy
early in February. and Pennsylvania,
Atcihsou and other large systems very
shortly followed suit.
NOT TEMPORARY.
Nobody at that time believed that the
situation which brought about this
change OF policy would continue. much
less that 1t would become actually
acute. ON the contrary the reduction
of capital demands by the railroads was
generally welcomed "a. the one thing
needed TO remove tbs element OF un
certainty then hanging over the situa.
ton and 90 bring about a speedy re-
turn Of confidence. That Nc was need
cd was cmineutly true; the nest of the
theory, IN view OF later developments,
hardly calls for comment What has
happened is substantially this: the poll
cy Of rctrenchment as adopted last
winter involved only the temporary
postponement OF improvements planned
but not actually begun; while conditions
since then have forced the railroads APP
parenty 90 discontinue 60 curtail OPP
cntious very radically ON improve
ments actually in progress A state of
affairs which early in the year was
evident only I'm a bad market for new
capital issues has since developed into
an acute money stringency. and with
this development the railroads have
been Obliged TO adopt even more radical
measures OF Curtailmeut. Improve
ments for which provision has already
been made for some years in advance
such as ST. Pauls Pacific coast extern
sion. can 90 on as though nothing had
happened. but less fortunate plans OBJ
Viously must suffer until the advent OF
more favorable conditions.
SOME EFFECTS.
Some ~ the effects OF this radical re-
irenchment policy, or rather necessity.
arc already plain. Reports This week
that the United States Steel corporation
bias Blown out ~ furnaces iu prepar.
alton Tor lcsscucd volume OF business
and that independent furnaces are also
tuepeudlug operations. indicate plainly
enough the extent to which continued
business activity depends upon the COM
unuance of railway construction opera.