The Washington herald., 1909-07-19

recession.
At the same time it should be/remem-
bered that prices did suffer q pretty bad
fall In the last days of June. Il must
5e pointed out. too. that in speaking OF
the present level Of prices as high it is
10 be borne in mind that prices are
high only because they have experienced
a quick recovery from a period of acute
depression. The reasons which brought
about this recovery are now so famiiarIy
known and their soundness has been
50 amply attested that II Is unnecessary
again even 10 refer 10 them.
Confidence Il justified.
As regards the business situation prop
er almost every development last week
was OF a sort calculated 10 justify the
/ confidence in the immediate future now
so strongly felt in all the higher financial
and commercial circles Midsummer IS
not oally a time Of the year when
business is !n its fullest swing This
year, however. in nearly all lines bust
ness is forging ahead without the usual
summer pause. and the cause for this
| is beyond any question that stocks Of
merchandise and commodities all over
the country are short.
In certain lines activity IS not so pro
! nounced as in others. The lumber trade
! is still comparatively dull. owing. pre-
sumably. 10 the fact that this is one Of
| the trades that VIII be directly affected
/ by the new tariff revision, and that the
nature Of this revision OF the lumber
duties is still quite uncertain.
Ia copper metal there has been re
I lapse from the high prices touched a
couple Of months ago. this being due IN
/ the first place 20 a marketing OF stores
OF the metal bought by English specu-
/ latOrs at the low prices tOucnCd after
/ the panic; and IN the second. 10 the un-
| doubted circumstance that production OF
/ the commodity, taking the world over. IS
/ now somewhat in excess OF the demands
/ OF consumption At the same time. the
| prevailing sentiment in the copper trade
| seems TO be that the reaction in the price
| Of the commodity has gone about as far
/ as II is likely to. and that around the
/ present level a large amount Of buying
of copper. induced by the fiattering prom
/ tse OF general business progress, ought
| 10 be expected.
Boom in Iron and steel,
These are. however. about the only
cases IN which the generalization Of a
/ broad improvement IN the country s
business has to be qualified 1t IS now
obvious TO every one that the iron and
/ steel business Is in a genuine boom. The
buying Of products and materials here
has gathered increasing force as the
weeks have rolled by, and although prices
have been advanced cautiously. they have
still risen considerably. and are now at
a point where II is estimated that the net
profits OF the United States Steel Corpo-
ration for a ton OF finished product are
| not heavily less than the highest ever
known
Il would not surprise any one If after
the new tariff law Is enacted a further
/ all around advance IN iron and steel
prices should be made. although Il Will
be a long time probably before there is
any formal restoration Of list" prices
( OF the kind previously known IN the
! trade. The most important point is the
! increased volume Of business. At the
moment, considering the enlargement OF
( the Steel Corporations capacity, the out
put Of the concern IS the greatest on rec
( ord. The peculiar Characteristic Of busi-
ness in this line is Of the same sort as
/ lildL Witnessed lNIoNAnONi Aslc 1cdt D
( namely. the relative sparseness Of rail-
I road orders. These orders are stlll large,
absolutely reckoned. but they do not
make such a large proportion Of the
! total business as they once did. for which
Adoubtless the true reason is the very sat
isfactory one that the general consump-
tion Of steel in the country has widened
/ enormously.
| All this lends particular interest to the
! question that is becoming more or less
I agitated IN Wall street as 10 the posi-
| blnty Of an increase soon IN the distribu-
ton upon the United States Steel COM
| mon shares. Il Is Of course wholly nat
! ural that discussion of this sort should
arise Wall street is a place where spec
! ulators gather and where a large num-
Der OF people judge matters wholly by
| speculative standards: and yet, as ell
| conservative people must admit. the true
way to Judge the value OF any security
is not the rate ar which profits are dis
| tributed, but the volume OF these profits,
I whether distributed or not. the improve
ment in the intrinsic value Of the prop
/ erty and the accumulation of eq1ities
! possessed by It that viii II properly safe
/ guarded insure a large and more perma-
/ nent distribution Of dividends IN due
course than could be secured by any
! other method.
Fear Corporation Tax.
With reference 20 matters in washing
/ ton. financial interest chiefly centers upon
the point whether the corporation tax
is TO be retained In the new tariff bill
Little objection is expressed by business
men. so far as their views have been
uttered ia Wall street. 20 the imposition
Of a tax as such. whether levied Upon
corporation incomes or not. which is
necessary 70 raise money for the nation
al well being Nor within reason does
the amount OF tho tax matter
! II is clear however. In the present in
stance thar the true purpose OF the par
ticuisr tax levy IN question Is not TO
collect money but 90 make a lodgment
I OF a risht of supervision OF corporations
that has never before been exercised or
granted Ia tho United States No one
can tell what the outcome VIII be, bue
the sincere hope Is in the circles down
town where the larger men" congregate
that good sense and conservatism and
a disposition on the part Of those in re-
! sponsihle control az Washington TO resist
this preliminary inroad Of socialism will