The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1910-10-16
NATURE HELPS IN
GREAT PROBLEM
Heavy Crops Will Reduce Cost
of Living
CORPORATIONS GO SLOW
Wall street Is waking Up In Response
TO Activity in Industrial Lines
Where People Really De-
liver the Goods
CORPORATIONS Go SLOW
BY PRESTON C. ADAMS


New York, October 15-(special)-Is ma
ture working a cure for the high price
evil? Indications are not lacking which
would warrant an affirmation answer to
that question. Many of the staples, par
ticularly breadstuffs, have by reason of
bountiful harvests struck the downward
trail and it is altogether likely others
will follow. For example, we are har-
vesting the greatest corn crop on record
and prices have struck a level which
makes the feeding often to live stock
the most profitable way to market it. In
time this must have its effect on the
price of meat.
No. 2 red wheat is over cents lower
than 1t was a month ago; raw sugar is
nearly one-half cent lower, and crude rub
Der is off 40 cents.
Other declines include patent flour,
which is cents lower than the end of
last month; winter straight flour, which
is 40 cents lower; mess pork 81 lower:
butter 1 cent lower; refined sugar 20
points lower; pig iron, 20 cents lower,
and pig tin, which is over 1 cent lower.
Important exceptions to the recession
of prices Is in cotton and coffee and in
both these staples the reason is obvious.
1t seems certain that there is to be an
other short crop of cotton in the high
price. In coffee, too, the trouble is due
to short crops. On the whole however,
it seems there is strong probability that
wages and the cost of living soon will be
close together.
Papers filed in the eastern states for
new companies with capital of s., 200, 900
or over, including increases in capital
during September, represented a total of
only $5S, 10000. This is the smallest
amount for any previous month since
March a year ago, when it was $50, $4,000.
In August this year the total footed up
s1o7 100000, while in September, 1909, the
charters filed involved $225 925,0oo. The
grand total of all companies incorporated
last month with capital of 100000 or
over including other states than those
of the east reached s114593, 500, against
1894 $40, 500 in August and 500, 700, 900 in Sep
TENDER last year.
II 10 cApldiilcu ltidt Inc pOOT SHOW1lB
made during the past month is due in a
measure to the fact that the increased in
Quiry for frst-class investment bonds
was confined to the issues of old high
standard bonds or stocks and has not yet
extended to bonds or stocks of new cor
porations. In view of this promoters are
naturally going slow in the matter of
bringing out new corporate securities un-
til such time as they shall be able to en-
list the attention of the general public.
| From the bluest to the cheeriest spot
| in the country is the transaction Wall
street has made in quick order. In early
| September everything was going wrong;
| today everything is turning out splendid
| ly. Crops are to net the farmers $780,
000, 900 and the railroads an unprecedented
amount of traffic. Money is to throw no
| obstacles in the way of speculation. Ill
tics-well, politics don't matter much any
way; they have been troubling finance
more or less from time immemorial,
hence a philosophic attitude is now taken.
The supreme court will decide the Sher-
man antitrust cases with usual sound
sense. Trade has undergone merely a
healthy slowing down preparatory to
leaping forward with characteristic Amer
lean vigor A month ago the bond mar
ket was dead today it is full of life The
railroads threatened all sorts of disas-
tiers if permission to raise rates were not
granted, but now 1t is explained that
very moderate concessions will meet cir
cumstances The public, after two
years of Indifference, are showing inter-
est in securities, beginning with bonds,
as Is eminently proper. Why, therefore,
should not Wall street buy, sell and be
merry?
New security issues by corporations in
the United States during the first three
quarters of 1910, have reached 1,242,S37,-
| 49, against 81, 215 905, 480 last year, the in
crease, therefore, having been $27,081, 1859.
OF the grand total the railroads contrib
uted 65,173oss, or s1o4 4os.65s more than
in the first nine months of 1909, whereas
the industrial and miscellaneous corpora
lions issued SIT, 324, 600 less than last years
total of 1855 039, 900.
| Sales of bonds during the last month
are estimated to have reached 800, 600 600
and the demand, instead of being salts
| fed, gives every promise of broadening.
The movement to date has been mainly
from the large international banking
| firms to investment houses and from the
latter to institutions where latterly more
inquiry from individuals, the highest
grades being most favored. If the i'm
provement be maintained, new fotations
will be attempted on behalf of the rail-
roads, several of which are in need of
funds.
| A kind of discussion has arisen as to
the size of the bankers profits. The
assertion has been made that their profits
are actually much smaller than the
profits expected by manufacturers or
merchants; that they are only or per
cent on a bond underwriting, whereas
| the merchant or manufacturer expects to
make or 10 per cent. True, a profit, of
say, per cent on a SO, 900 underwrit-
ing seems very moderate, but that is the
profit on the gross amount of capital in
volved: the profit on the net capital en-
ployed by the underwriting banker may
look very different. To finance, 100000
at the current rate of interest and fur
nish only 100000 himself. His profit
in that case Is to be reckoned differently.
On SIC, 100000 a profit of per cent is
100000, but a profit of 100000 on a net
capital of 100000 directly employed by
the banker is 20 per cent However the
banker has paid the prevailing rate of
interest on 100000 which is borrowed
| That might be 4 per cent for three
months, or $50, 900, in which case his net
profit on the net amount of capital he
himself provides Is $4,000, or II per
cent. And il this transaction be COM
pleted in the space of three months, the
bankers own capital is earning at a
rate of A per cent a year. 1t does not
as A per cent, because there are mis-
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