The Birmingham age-herald., 1907-06-10
CROP CONDITIONS MAY BE IMPROVED Financial Community Awaits Report With Interest WEATHER NEWS BETTER Cereal and Cotton Crops Are Believed to be Far More Promising Than
 Week Ago-RalIroad
 Earnings.
WEATHER NEWS BETTER

New York June 9.-The report of the agricultural department on the condi- ton of cereal crops to be given out to- morrow is awaited with great interest in the financial community. The expecta- ton that 1t will show a considerable im- provement In the condition of crops over that shown a month ago played a con- siderable part in the better tone of spec uiation in the stock market this week, Reports of condition by several of the state authorities covering the same period as the expected government report, and which show a material betterment during May, furnishes ground for this expeota- ton.
 Weather news during the past week also indicated that some progress was made in making up deficiencies in temperature and moisture, which had been against the wheat crop. The government report on cotton condition given out early in the week was not regarded as conf1rmatory of the extreme pessimism which had been rife in the trade Ground for hope of much improvement In the cotton prospects with favorable weather conditions follow
  ment report was also indicated by the re- port, and the weather news since has been better. Altogether the week has seen d distinct improvement In the feeling re- garding the crop prospects, and anxiety over a possible absolute failure of the crops has subsided. The problems of the crop outcome are of the first importance in shaping the financial disentanglements which are in prospect and the speculative comment Is correspondingy frightened with this betterment of prospects.
 Railroad Earnings.
 Another substantial factor in the Im- provement of sentiment is the better showing of the railroads in reports of net earnings in April. The gross earnings of railroads have shown no sign of im- pairment at any stage of the doubts, which have oyerspread the financial horizon the heavy movement of traffic being fully sustained throughout. But the rate of operating expenses by reason of the rise in price of material and labor had expanded so much in excess of the gross increase up to April, showing that grave misgivings had grown up over the ability of some of the railroad companies to keep up their present rate of dividend disbursements, with the threat to the in- tegrity of net earnings thus indicated. This tendency of railroad net earnings in the recent past has been responsible in no small part for the impairment of credit which has made the raising of new capi- tai for extensions so difficult and so costly.
 The Turn Upward.
 The turn upward in the tide of the net return to the railroads Is therefore of great influence In increasing confidence in values of securities. Better operating conditions on the railroads due to the weather Is partly responsible for tho amendment for the eXtravagant cost of operation which was eating up profits. Congestion of traffic has been relieved to some extent, with help to the rate of cost of transportation.
 New freight classifications going Into effect also increase the rates to the rail roads in various directions. The growth of confidence in values has not yet prompted large absorption of securities outside the professional class of operators and their activity is largely confined to a few highly speculative securities. The bond market has failed to reflect any awakening of investment demand up to this time.
 Dlssoutions of underwriting syndicates are still reported from time to time with a large proportion of the underwritten bonds on hand for distribution to mem bers with prices for the bonds ruling in the markets at figures far below the un- derwriting. That much remains to be accomplished. therefore, towards the ab- sorption of the congestion in the bond market is evident Substantial improve ment in the market for bonds is awaited, as the decisive evidence that the troubles of the securities market are in the way of final amendment The continued out ward movement of gold helps to keep opinion unsettled over this phase of the situation. Money rates on call and for early maturities are easy indeed, but the high rates still paid by corporations for capital accommodations and the large capital requirements, known still to ex- ist, make the flow of gold reserves from this market seem something of an an omaly.