The Washington herald., 1908-06-22
Wall Street Satisfied with
Nomination of Taft.
WAITING ON DENVER NOW
Business VIII Fall on ns Usual in
Presidential Campaign Yenr Until
After the November Elections
European Banks Have Enormous
Reserves for This Time of Year.

nominees and platform OF one party set
tied, with another great political conven-
ton on the point of meeting, and with
the general electoral contest yet 20 be
entered into it is manifest that political
influences win overhang the stock mar
ket through the greater portion of the re-
mainder Of the year.
Last week, as during last month. the
net result Of these factors was 70 make
for inertia iE the speculative trading. Up
TO the hour Of Mr.. Tafts nomination at
Chicago there were very many intelligent
people In the financial district who were
fearful that through some way or other
Mr.. Roosevelt would be placed in nomina-
tion for a third term, and how near this
contingency was may now be seen from
the fact that IN spite Of oft-repeated
official declarations on the part Of the
President and those purporting 10 act as
his mouthpleces that mo friend OF his
would urge his nomination. it was yet
plainly evident that in various events, TO
wit. mostly the adoption Of an "unsatis
factory" platform, Mr.. Roosevelt would
again seek to grasp the Republican stand
ard In his hands.
Europe Raids for Gold.
With political concerns out Of consld-
GRAFTON. real financial developments last
week were mixed. and were upon the
whole not calculated IN and Of themselves
20 stimulate buying OF stocks. Primarily
there began 10 be Impressed upon the
mind of Wall street the enormous pro
portion OF the raid that Europe is now
making upon our country's gold reserves.
These gold tal1ings have amounted in the
few weeks since April il, when the move
ment began. 10 Si5. 600. a sum greater
than any heretofore withdrawn from the
country within a similar space Of time
II seemed a little while ago as II the
movement was over, owing TO the in
creased supply Of money IN Europe which
began TO assert its influence upon money
rates there no less than upon this side
OF the Atlantic.
The Bank OF England has now the
largest reserve Of gold I'm its Golfers that
il ever had before at this time OF the
year. The same is true OF the Imperial
Bank or Germany: while the gold hold
ings OF the Bank OF France are now by
far the largest ever known. With tho
financial strain in Germany so mitigated
that the discount rate Of the Reichsbank
has fallen to normal figure and with
business relatively Inactive in England
and all over the European continent. IL
is absurd 10 say that the pressure e1erted
by the great foreign banks 70 force gold
from this country is In any way con-
nected with business exigencics either
actual or impending.
Europe Seizes Opportunity.
The sole reason why these national
banks arc continuing to add TO their
already huge reserves at our expense is
that they have discovered in conditions
here. that IS to say. the financial depres-
sion IN the United States, the most favor
able opportunity for adding 10 their stores
OF ready money that has ever been pre-
sented: and there is now every reason 20
believe that they will continue 70 draw
gold from this country. despite the swol-
len condition OF their reserves, until a
rise in money rates here prevents them
from doing So No hurt Is being expert
enced by us at the present time as the
result OF this. but its adverse influence
viii be experienced when business begins
10 revive with us, as viii certainly be the
case IN due time.
Rates for the Use Of money win nee
cssarily rise more quickly than otherwise
upon depleted stores OF bank cash; and
the rising tide Of business will find itself
hampered by the necessity Of having TO
compel return from Europe OF the
money now being sent there seemingly
IN such a needless way. The matter IS
for the moment, Of course, largely aca-
demic. but further development Of the
week. that OF the steadily decreasing
earnings OF the railways, is not Of like
sort. since these point 10 a continued con-
traction OF business that IS resulting in
additional reductions OF railway divi-
dends and plainly prophesy II their
60 "a,
railway wages that has hitherto been
parleyed with and postponed.
RAILWAY Earnings Decrease.
The Financial Chronicle in a recent
elaborate compilation OF railway gross
earnings showed that the percentage of
reduction in this respect has been dur
ing the year S74 In January, l071 in Feb
ruary, 14.36 in March, 1885 In April, and
p in May. The query is becoming highly
interesting just when this progressive
curtailment IN railway gross revenues Is
10 stop Earlier in the year Il was not
materially Offset by a compression Of
operating expenses. Happily, since that
time these expenses have been placed
under control. so that railway net earn
ings lately have made a better exhibit
than they did before. But there is a
limit 10 the extent to which railways
can cut down their expenses for main
tenance Of way and for conducting trans
portation. and the indications are that
unless business improves a good deal
more in the future than it has in the
past not only must more be heard from
in the line of dividend reductions. but
that the long delayed cutting down of
wages must begin.
Stress was very naturally laid upon
these possibilities last week by the an
nouncements OF the passing of the divi
dends on their common stocks bv tho
Lake Erie and Western and Big Four
railway companies. by the reduction of
the Louisville and Nashvlle's annual
rate OF distribution from 10 per cent.
by the cutting OF OF the dividend entirely
upon Republic Iron and Steel preferred
stock. by indications that a similar or
very nearly similar policy would have
70 be pursued by some. II not all. of the
railway supply companies and by the
extraordinarily bad earnings statements
for May OF the Baltimore and Ohio Rail-
road Company. which was almost the
poorest that has been presented bv anv
one Of the country's large railway sys |
TENS this year.
Fall I'm Baltimore and Ohio.
The Baltimore and Ohio's gross earnings
decreased 30 per cent and its net 80 per
cent. and the revenues OF the road for
the fiscal year are away below those
necessary to maintain its per cent dis
tribution. It IS said that a part cular
reason for the slump In the Baltimore
and Ohio's receipts is the especial pros
tration in the soft coal trade, but II this !
"a hot fr-v, v,s.f.-
OF revenues must be taking place in the |
case Of other bitumlnous coal carving |
railways. as well as in many lines OF
Observation-Disclosures nlaInnea IL thn n..Lr.r..-. !