The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1910-08-28

is pretty sure to find reflection in the
quotations for -Amalgamated copper
Such destruction of value cannot occur
without result. This is a more important
matter than all the Idle talk about cop
per mergers or mysterious hints con-
corning remarkable things that are to
happen. Tt Is a curious coincidence that
Amalgamated copper through all these
shalzy markets is about the firmest of
the conspicuous speculative stocks There
is talk of an immense short interest in
it which may be true, but even so the
explanation is inadequate. Unless all
signs fail, there will come a day of
reckoning to the long account in Anal
gamated Copper.
A notable feature of the day, a par
amount feature speculatively considered.
Is the constant decrease in net earn
ings of the railroads as compared with
gross increases. Gross earnings reveal
remarkable high records rejecting no
doubt the wonderful growth of population
in the agricultural districts and the pros
perity of our farmers. Both the east
and west bound tonnage, are great
or than ever before known. But
the problem up to the railroads is how
to pay their running expenses.
In almost every case wages have been
increased and cannot be decreased with
out precipitation of struggle with trades
unions which would spell disaster. In
deed, there is no hint anywhere Of any
attempt to reduce wages. The advances
have come to stay. When one consid-
ers how great an item wages is the
vast Importance of this fact can be
appreciated.
In Addtion to this everything which
the railroads have to buy has gone up to
record breaking prices. Hence, the gross
earnings Increases are more than alb
sorbed and in many cases result in net
earnings decreases. There seems to be
no cure for this unhappy situation except
an advance in traffic rates, for which
the railroads are strenuously fighting
before the Interstate Commerce Commits
sion. The Commission has now practi-
cally autocratic authority in this matter
and it is up to it to say whether or no
the railroads shall be permitted to adj
vance their charges.
Against such advances is a very pow
erful public sentiment, shown in the or
ganization of shippers in state after
state. The theory of the shipper is that
our railroads have so much water in
their capitalization that present rates
afford them more than fair opportu-
nifty to earn a reasonable return upon
the actual investment made This, of
course, brings up the question raised
by President Taft of government investi-
CATION of the actual value of railroads.
Beyond doubt there are many roads
whose capitalization is far and away
beyond the real assets behind such cap
italization. This is evidenced by the
quotations of many of our railroad stocks
at way below par value. AS to those
which are quoted beyond par value, there
is difference of opinion Take for ex-
ample Union Pacific. 1t Is we'll known
that this system paying 10 per cent upon
its stock officially states that only {
per cent of this is from railroad earnings.
the remaining per cent being derived
from income on investment holdings
Now beyond doubt the investmen.
holdings of Union Pacific have shrunk
enormously in value since 1907 The
question naturally arises can the Union
Pacific 10 per cent dividend be main
tanned If this shrinkage remains or goes
further? AS straight s per cent divi-
dend payer, Union Pacific would natur-
ally sell In the neighborhood of par
There seems to be no immediate threat
to the present dividend but far sighted
investors are scanning the situation with
a good deal of doubt. There has been