New-York tribune., 1908-05-04
THE WEEK IN WALL STREET.

stock market. last week its demonstration, III
the twentyfold subscription for the S4o.eOoo0o or
bonds offered Nas among the most potent in
fuenceS contributing TO the further advance III
prices. Another immediate cause was the heaNN
covering of shorts. but this really referaoie
to the advance which had found its occasion and
its incentive in the fact, shown by the Penn
sylyania subscriptions. that confidence had so
far been restored that capital was agaln oecolh-
ing available for investment in long term Sc
curities bearing a moderate rate of interest.
Following the highly successful pennsylvania
operation came the offering of S25.O00O0O inter
borough Rapid Transit notes. which were read
lily taken, and which. although not possessing the
peculiarly attractive features of the Pennsyl-
vania bonds, present safe investment secured
they are by practically the entire properly
of the system and carry the lnducemeht OF Il
larger interest return. With the reopenins ol
the investment market many other rallroa1S
may be expected to offer issues OF BONDS, but
the investing public. although now not unwilling
10 put its money into bonds in preference TO
allowing it to remain idle in the bahkS dt d
lower rate of interest or with no return at all
are certain to careful discrimination for sone
time to in its commitments, and VIII pe
inclined to test other offerings by the hlgh
standard of the Pennsylvania. Parsof the luflds
obtained from the sale of the railroad honds VIII
probably b$devoted to payment of floating OBJ
legations. but a very large proportion VIII De
available for the purchase of equipment, steel
rails and structural material. as well as for the
employment of labor in the prosecution or en-
terpriSaS already under way. thus giving a sum-
ulus to various industries The steel manufact-
urers have as yet shown 40 disposition to grant
price concessions, however, and in view OF that
fact and of the difficulty still existing IN placing
bonds. the railroads will for the present make
the most careful use of the funds which they
may be able to obtain and eXpend little CT
nothing in improvements not necessary and in
extensions.
% Business conditions have in the last week ex-
perienced no change for the better An indica-
ton of the extent Of the prevailing stagnation
is the American Railway Associations s report OF
the record total of 375.170 idle freight cars at
the middle Of April increase of 6S,265 IN
fortnight. These figures might conceivably be
representative of the seriousness of the business
depression several weeks previously. manufact-
,Irers and other producers having meanwhile re
ceived heavy orders. the execution or Whlch
takes time, but. matter of fact, authehuc
reports from the great manufacturing centres
that activity is not being resumed and that
orders for fall business not being booked IN
any volume. Bank clearings, too, show the De
pressed state of trade although their shrlnkage
is not so severe as in the recent past, and rail-
road earnings continue to reflect q very large
falling off in traffic Although the railroads are
striving to offset as far may be possible the
loss of gross earnings by saving OF operating
expenses, some of them with marked success, a
general reduction in the dividend rate, following
the example SET by the New York Central and
the Atchison and in the last week by the Penn
sylvania seems inevitable The plan Of help
ing the railroads through the depression by an
advance in freight rates still under considera-
ton and the notice filed last week by the rail-
roads IN the Southeastern territory OF increase
in their tariffs on fresh meats may be the first
move in the rumored general advance 1here
will be few to dispute the proposition that
freight rates are and long have been so low that
an increase might not unJustIy be MADE IN lhenl'
but many competent students OF the subject
doubt strongly the advisability of attempting to
effect that increase at a time when the prices of
commodities generally are declining.
The statement of the United States Steel Cor
poration for the three months ended March
81 made a showing in line with the general i'm
preston concerning the depression IN the steel
industry. Net earnings We're little larger IMAM
had been locked for, but the figures although
including this year the results from operation of
the Tennessee Coal, Iron & Railroad property.
were less than one-half those for the corre-
spending quarter in 1907. The usual dividends
were declared, and final surplus of s7,S65 was
shown; but in place of this practically infnltesl-
nal surplus a heavy deficit would have been
shown had not the appropriations for deprecla-
tion and reserve funds been severely cut, those
for special Improvement and replacement funds
omitted and the extraordinary appropriations
taken out of surplus in good quarters not or
dered this time. 1t should be pointed out, how
ever that the policy Of the Steel Corporation has
been consistently TO set aside in the seasons of
abundant prosperity extremely liberal provision
for these several funds. and to curtail or omit
them in times of adversely, as in 1904; and 1t
may be noted also that with the corporations s I
plants operated to only about 80 per cent OF
capacity, al present. the depreciation and re-
placement funds in less need of replenish- !
ment than in normal times II was the amount !
of untitled orders March 81. only 3,165.343 !
tons, which was the most unfavorable feature Of !
the statement, total which caused speculation !!
as the outlook for the maintenance CT the |
dividend the common stock unless business !
should soon improve The smallness of this |
item also served to renew the discussion of the !
wisdom of the policy of the steel manufacturers /
as prices the opinion gaining ground that the p
granting of concessions would result in a heavy I
increase III orders. The pig iron makers also !
have adhered 10 the old cae of prices. but ;
sentiment among them in favor of a cut seems !
10 be increasing. and at their meeting this week .
it is fairly likely that a reduction will be for
mally voted.
Yet. with industrial conditions in various d-
rectionS decidedly unfaVorablC the sentiment in ,
Wall Street which became gloomy while the in
dustrial and business outlook declared by :
and merchants to be still prom
Using and encouraging, IS now becoming more
cheerful. The great hnanciers and men of af- (
fairs who form that sentiment are in a position
offering peculiar advantages for Judging the fut-
ure. and il is their action upon the conclusions .
thus drawn which makes the stock market
tcipate by considerable period downward o
an upward trend in the business world. Al I
though the federal Treasury is steadily piling
up a deficit, its position is vastly more easy
than at the. corresponding date following any
former serious panic. with its $1S5,000000 on so
of deposits in the national banks, which may be
withdrawn on the shortest notice. Then. too in
its recovery from panic conditions the country
is not now handicapped by any controversy ever
the money standard and the debt-free and
prosperous condition of the South and the West.
so strongly in contrast with the situation Of
fourteen years ago. is vital element of reas-
surance. The crop season is a forward one.