The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1909-11-22
Business Review of The
Past Week by Henry Clews

Financial problems are working
their way out through a series of con-
flicting influences. The general UNI
dertone in trade. industry and finance
is one of confidence Business contin-
ues large in volume, and the belief il
continued activity is universal. La
Dor is well employed. and there would
be little reason for hesitancy were It
not for the phenomenally high level
of prices, whether of merchandise or
securities Complaints of the high
cost of living are universal. There is
good reason for many of these COM
plants, but the fact is they are fire.
quently being made the most of as an
excuse for advance in wages. A far
more potent element in the increased
cost of living than is readily admit
ted. is the extravaganza which has be-
come national characteristic and
weakness. This tendency towards ex-
travagance is more evident in the
home than in business or in public af-
cannot but be injurious. Many total
ly unnecessary amusements and luxu
ries are now INDUCED in which were
never thought Of ten years ago. and the
result must be greatly diminished ma
tional saving power, out of which
should come our new supplies OF cap
ital. AS to what will check this up
ward trend in values nobody can fore
cast. Production has not yet outrun
consumption. Combinations of all
kinds are restricting competition and
putting up prices. Initiation and spec
ulation are adding fuel to the fire.
and at present there is nothing in sight
to check the advance except exhaustion
of the purchasing power of the con-
sumer That too. is not in the i'm
mediate future.
Coming down to the stock market il
appears to be dividing itself into two
sections-the railroad and the indus
trial section. Railroad shares. though
having undergone moderate recessions.
are still upon a very high level. 1t is
true the railroads are making large
gross earnings because traffic is now
as heavy as before the panic. and rates
have been advanced to more profitable
figures Railroad managers. however,
are concerned with series of trouble
some problems. Economies which fol-
lowed the panic are now enforcing cor
responding heavy OUTLAWS for better
ments and engagements. which means
not only increased expenditures out of
earnings, but larger applications for
new capital They are obliged to pay
more for supplies, and the costs of op-
Grafton are steadily increasing. Labor
agitations are already confronting
them. So. too. are the possibilities of
an antagonistic Congress during the
coming winter Willie. therefore. the
earning capacity of the railroads is
promising. their outlook as invest
ments is not especially attractive. Div
idend increases are very remote owing
TO circumstances just alluded TO. and
the poor returns on present market val
ues make railroad shares less attract
i've 10 the ordinary investor than for
uerly Until a closer adjustment has
been made between current rates OF in
terest and prices of railroad shares.
and until the chances of better divi-
dends improve. purchase of the aver
age railroad shares should be made
with caution. The bond market con-
tinues very unsatisfactory. and though
no important declines have been re-
corded. the demand for this class OF
investments has much declined and
values show a softening tendency.
In the industrial section of the mar