Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-02-10
Financial News Letter
BY W. G. NICHOLAS.

NEW YORK, N Y, February 8, 1907.
Wall street has had a chance this week
to look back at the dizzy heights lately
occupied and to make measure of the
future. There has been a calm after the
storm. Big spectators who were hurt in
the long decline in the Hill stocks, St Paul,
Reading, Canadian Pacific, and some other
active railway shares, have had an oppor-
tunity to put their houses in order The
one thing in the future that seems to stand
out most prominently is that the railways
are getting ready to raise rates. Mr. Hill
of the Great Northern, before he left for
st. Paul early in the week, said that an
advance in freight rates seemed Inevitable.
It might come first in the eastern trunk
lines, but it would probably spread all
over the country. Wages of labor and the
prices of materials and operating condi-
tions have been steadily making for smaller
net earnings. The commodities of the coun-
try have been advanced in prices, while
transportation rates had been showing de-
creases. This, Mr.. Hill said, was an order
of things which could not last, and the
time was at hand when an advance in
rates was unavoidable. This is the senti-
ment expressed by leading railroad men on
all the big lines. The same thing was said
In different way by President Finley of
the Southern the other day in his open let
ter. The Pennsylvania, 1t is understood,
is considering the same proportionate raise
In freight rates that it recently made in
wages, 10 per cent. Railway managers
never like to raise rates because they know,
that shippers are quick to complain, and
all sorts of opposition Is thereby aroused.
But the railway men say that the increased
cost of everything, including materials,
wages and capital itself, must logically be
attended by an increase in rates. The rail-
ways are in business to make money like
any other commercial ventures.
- q
When everything has been moved up to
the new level Of prices 1t is question how
long the country will stand it. The result
Of such raising of prices all along the lines
in previous booms has always been that
these high prices are self-corrective. The
people curtail their expenditures for mer-
chandise, manufacturers cease to work
overtime. and the railways have less bust
hess to handle. Then the reaction comes
The reaction Is usually carried too far, be-
cause people become just as pessiinistic
about the future as they were previously
country we have escaped serious depres-
sions because Of the bountiful crops In the
west and south. Big corn and wheat and
cotton crops have carried US on from one
prosperous year to another. And 80 now
the speculative community Is beginning to
weather In the west now L. the kind the
farmers want for their grain, and there
10 every reason to believe now that this
years harvest will again be Of the bumper
variety. Looking stu farther ahead the
speculative community Is beginning to con-
slider seriously the national political out
look Nearly every presidential election
year In this country Ii one Of reaction In
trade. Capital becomes conservative, un-
certain az to the outcome Of the contest.