Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-04-02

watered and that American methods could
not be trusted
Then, too, things undoubtedly have been
done to aggravate this feeling of dstrust
You know, of course. to what l refer the
manner of the declaration of the Union and
Southern Pacific dividends. I do not mean
to say that the dividends being paid by
those roads are not justified by their earn
ingS. but they ought to have been declared
under other circumstances. Corporal onS
the size of the Southern and Union Pacific
winch together have a capital of close to
Si0oWo,0OO, cannot be regarded as private
concerns, and they ought not to be man
aged as such. The pub ic is entitled to be
prepared for the steps taken in the IN m
agement of such corporations. Such cor
porations must necessarily take the public,
to considerable extent. into their conf
dence.
Now I find in going over the situation
with people here that they think that this
movement for government control of the
railroads. closer government control and
supervision, is one of the causes of the
decline in prices which has taken place
| do not think that this Is the case. The
real cause of the recent trouble was that
the demands for capital greatly exceeded
the supply of capital and retrenchment
became necessary.
No Water in German Stocks.
The question whether or not it is good
to have such a multiplicity of industrial
corporations is one that must be judged
by local conditions. In Germany there can
be no watering of stock; every share of
capital must be issued for it's full value in
cash. If under conditions existing here you
had such a multiplicity of industrial corpo-
rations We have, there is no telling what
would result.
But to return to the effects that dear
money has had upon the situation. l think
people are beginning to realize that a small
er volume of business done under more ia
vorabe conditions will be pest for all con
cerned. No real good has come of lie re-
cent excess volume of business. Wages, on
the one hand, are high, but, on the other.
the cost of living and the price of materials
are high and money is SO dear THAT larger
shows less profit than would be shown by
smaller business done with capital that
costs less
Il think that business will come down to
the level at which it can be readily handled
/ think that it is likely that say in two
years. conditions will right themselves
again. With contraction in trade and the
continued large production of gold, 1t Is
likely that within that time monetary and
Industrial and commercial conditions wilt
fully readjust themselves and that we Will
then be ready to go on with new develop
ment
so far as prices are concerned. 1 think
that We have seen the worst. And 1t Is
well if it is so, for, although the market
has stood the decline in a way that is Won
derful, 1t has been made clear that the
losses have been borne on strong shoulders.
1t is question, though. if the market could
withstand another test without the open
admission of serious losses.
Some Foreign Buying Here.
The present attitude of foreign invest
ors toward this market Enthusiastically re
fleets the feeling of distrust to which !
have referred, but nevertheless We have
been buying here to some eXtent-not. how
ever, to the extent that would be likely
were entire confidence felt In the situation
here. We ourselves have always favored
investment in good American securities
whenever conditions at home warrant such
investments. The needs of our own country
must, of course, be provided for first, but
when they have been met we always regard
good American railroad issues with favor.
We look upon them as the safest class of
securities and very satisfactory sub
stitute for our own railroad securities,
which to so large an extent have been re-
moved from the market through the re-
purchase of the railroads by the govern
ment."