The Washington herald., 1910-07-18
WALL STREET NEWS
Cheerfulness Grows as Mar
ket Week Nears End.
INCREASE IN MAY EARNINGS
Forty-three Roads show Heavier
Operating Expenses, but Likewise
Larger Income General Outlook
Is Improving, as All Crops but
Wheat Give Favorable Reports.

New York. July 1.-THE stock market
looks proverbially ahead and the ques-
ton OF prime interest last week was
whether or not in the previous week Of
declining markets il had not come 10 look
through eoIored glasses II had seen
a weakened condition among interior
banks. money stringency in this city.
failure of the railroads 20 maintain
current dividend payments because OF
the operation OF the new railroad law.
a crop failure due 10 the 6eteriorated
condition OF spring wheat, a business de-
preston comparable 10 that OF 1898 and
1894. and. through some glasses. busi-
ness and financial panic for which every
setting was arranged and only the date
OF the production left undecided.
At the beginning of the week those
who saw the dark view were among the
great majority in Wall street-at least.
among the great majority of spectators
but as the week advanced, though It
was by no means devoid OF unfavorable
developments, opinions less and less pes
RiInistic We're entertained until at the
close the accumulation Of Important news
Of favorable character gave positive
assurance that many Of the prophecies
OF disaster must be recalled.
Roads Report Increases.
Forty-three roads. which up to the end
OF last week had submitted statements
for May. all the big systems being in
eluded. reported an increase of S1s,l2s.OO0
In operating expenses over the CORE
spending month of 1909, but this formid-
able total was more than Offset by in
creases in gross earnings, so that de-
spite the unprecedented increase in ex-
penses, these roads were able TO show for
the month gain OF $500. 600 in net earn
ings. The increase in net Is OF course
inconsiderable. The fact remains that
there was an increase in net. and II may
be worth consideration that even a con-
siderable decrease in net would not
Jeopardize the ability OF any Of the old
standard railroads to maintain current
dividend payments. Such a decrease is
not at all indicated by the course OF the
railroad business since May.
Though net earnings for June are rot
at hand. fifty-three roads. comprising
third OF the country's mileage. show an
increase of 1914 per cent in gross and
n.2S in gross for the first week OF July.
In respect 20 these earnings it is signih-
cant that most OF the railrods did not in
augurate a policy Of retrenchment until
the latter part Of May or the early part
Of June. so that the increase in expenses
shown in Hay Is not at all likely to be
duplicated
It may be that dividends will be re-
duced on some OF the smaller roads on
which distributions were Tashly and un-
JustihAbly increased last year, but the
average current earnings OF companies
with stable dividend records place far in
the future the predicted period OF de-
creased dividends. Last week the only
company which changed its dividend rate,
: the St Louis Iron Mountain and South
ern, raised it. Standard railroad stocks
at current prices yield an income return
of from 70 ga per cent and the question
arises as to how long. now that the divi-
bends are seemingly assured, these stocks
are to continue selling at prices which
normally prove irresistible to investors.
Crop Outlook Improving.
If IL is argued that railroad dividends
are threatened by poor crop prospects, it
can be asserted in reply that the crop out
look this year is much better than last
The statement makes liberal allowances
for the damage TO spring wheat and the
probability that the total wheat crop will
be less by 100000 bushels than last
years final return. Last year the wheat
crop was good, but the cotton crop
amounted to but 100000 bales, as COM
a ma
900, bales this year. The prospect of an
increase OF 100000 bales OF cotton, worth
now more than so a bale more than
compensates for the loss of 100, 900, 900
bushels of wheat worth less than $40
a bushel Moreover. corn still gives prom
Use of a record yield considerably in ex-
cess Of 1900, OOOO 600 bushels.
AS the railroads are effecting economies
and protecting gross earnings from the
inroads Of higher expense accounts, so
It is also a period of conservatism OF re-
sources with the banks. Bankers in the
big reserve centers were properly alarmed
when the Western bank reports in March
showed a great expansion of loans and
loss OF reserve. Returns from the June
call are by no means complete, but those
have been needed. that the hanks have
been gradually calling in loans and grad
ually strengthening their reserves.
In general business a policy of con-
servatlon was also indicated The stats
tics OF exports and imports for June
showed tendency to curtail expenditures
for Injuries and TO convert into cash
goods previously held for high prices
Imports for the month were less in value
than In any previous month since last
August. Exports we've greater than In
any previous June OF the decade, with
the single exception Of June, 1867, the
month which ended the most prosperous
year IN the oountry's history. Exports
exceeded imports by more than sSO00060
as compared with more than S7,c00OO0 ex-
cess OF imports in June, 1909, and more
than 100000 excess OF imports in
March last. Extravaganza, on which
prominent Wall street banker not long
ago dilated as Our national vice" seems
by these figures 10 be diminishing, so that
the balance of trade is again turning
however slowly. in this country's favor.
Some UnfavorabIe Developments.
While all these developments toward
proper readjustment in the eountry's
business and financial AFFAIRS were most
encouraging. the week had many unfa-
voTable developments The copper metal
position went from bad to worse, and at
the end Of the week there was no more
LOAN SOCIETIES.