The sun. [volume] (New York [N.Y.]) 1833-1916, 1909-05-17
THE. FINANCrAL SITUATION.

lnoro Wae really utio mango eitneI ~
the financial situation or In the security
market proper last week and people In
the financial district had no such strik-
ing Developments to talk about during
the week as the decision. Of the Supreme
Court in the commodities clause case
o. the report OF the. United States Steel
Corporation or the March quarter. which
were leading topics OF conversation a
little time before. The progress OF al
fairs last week was. however. thoroughly
typical Of those tendencies in business
and finance that have held sway for many
months past. There was no: boom. no
Stock Exchange excitement, no wide
fluctuations In prioes. but all the time a
steady and sustained betterment In com
mercial. mercantile and financial life.
The only difference between conditions
at present and those two or'three months
ago Is that the expansion OF business
is O proceeding at a moro rapid
rate and the evidences OF Improvement
are becoming more clear. Two OF three
specific businesses could be picked. out
earlier in the year in which distinct signs
OF greater prosperity were making them
selves manifest Now such instances can
be complied all along the list. and the
cases cited are so numerous that IL can
fairly be said that the business enter
prises In the country that are still notably
depressed form an exception to the gem
eral rule. Attention has OF course been
attracted in Wall Street by the increases
being shown in monthly. and weekly re-
ports Of the earnings Of the railway COM
panies. and the substantial encouragement
given to sentiment BY these data cannot
be lessened by pointing out that tho
earnings, compared with those OF last
year, when the transportation business
was at low ebb, and that the earnings
now coming in are smaller than in 1907.
when they were at their highest record
notch. 1t may be questioned, however.
whether an even stronger impression
has not been made upon the minds Of
and investors by the various
aud ~unmistakable proofs .addIced Of the
condition and prosperous out
look for 10 many industrial companies.
The general truth on this subject is that
many Of, tho older industrial orgsniza-
tons Of the country. those that have been
for a number Of years and have
attested in this time that they are going.
and we'll managed concerns. have
at q point where their net earn
ing capacity year in and year out stands
at an irreducible minimum that justi-
fes a larger degree Of investment conf
dence in them than has ever before been
given. The earnings Of not q few Of these
are greater now and have
been in the last two months far greater
than is commonly understood In Wall
Street or throughout the country; and
the old time criticism directed against
these companies. that they arc over
has lost much Of it's former
The increased consumption OF
foodstuiYs throughout the country Is
to every ono. but the ann in
consumption runs through every
OF industrial activity, and
the business Of the iron and steel COM
p~anies, OF the woollen companies and OF
the cotton oil, the Fertilizer. biscuit. rub
Der. electric. typewriter. leather and
harvester machinery companies Is reach
surpassing dimensions. There Is no
doubt that all these companies have prof.
tied much by a general enhancement In
the public estimation Of the value of
stocks for investment pur-
poses causod'by the record that has been
made for itself by the United States Steel
What hostile critics Of the
stock market usually overlook, or at least
have overlooked for q year back in form
.ng their judgment % TO a proper market
valuation OF the United States Steel oom-
non and preferred stocks, ia that these
or at least the first named. are not
upon their uren dividend re-
urn but upon the demonstration OF
heir ability fairly to earn their dividends
full charges for depreciation through
! prolonged period OF generally hard
lines, and that their vast equities at. some
uture time and perhaps at a time not
ar distant must. pass from q potential
nto a concrete form. The United States
common stock may be compared
It the present time with the position
by Reading common stock sew
'ral years ago. and perhaps wen to-day.
Both stocks represent a tremendous
Of latent earning power. and in
he case Of both stocks an immense sum
II money has been taken out OF earnings
md laid out. without an increase in capt.
slization, in lettering the condition OF
he property represented.
II there was any special news last week
was that pertaining to the increasing
orders for iron and steel materials and
he, entrance at last into this field Of pur-
OF the railway companies. The
chicago. Milwaukee and st. Paul and
Sew York Central companies have al
.eady placed large rail orders. and in all
probability the Baltimore and Ohio and
Harriman lines will soon make similar
contracts. All these companies have
,eld OF from action OF this sort as long
y they could. and indeed it Is generally
that their iron and steel buying
the present year will not be as great
Is 1t will be in 1910. Nevertheless, II
business goe on enlarging
II the rate that 1t has done the 1910 bust
less will be we'll above that Of 1907, and
g rails and the like have been bought
,ut sparngly in the last two years they
nust be bought. as II would seem, in an
'verwhelming way during the next eigh-
een months. The president Of the Now
-ork Central stated last week that the
ar loading owe his lines wa greater In
he month OF hprilthan It vas in . similar
ionth in any year with the single.excep-
lon of 1907. and that thus farm May the
have been greater than in May.
boz. The last fortnightly report, Of the
mount OF idle freight cars over the coun-