The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1910-11-19

son for anticipating any calamity as
a result of the Supreme Court deci-
sions when they arrive. The position
of the railroads in regard to transport
tation rates is also more satisfactory.
In the first place, many of the rail-
roads are showing large gains in gross
earnings, notwithstanding the talk of
business depression. and, could ex-
lenses only be brought within reason
able limits, there would be no fear
as to net results. Even in the latter
respect the railroads are maintaining
their position better than anticipated,
and there is no immediate prospect
of am reduction in dividends. The
railroads, however, are much in need
of new capital, and this they are I'M
eble to procure under present financial
conditions. In view of necessary large
expenditure by the railroads it is not
improbable that the Interstate Com
merce Commission may allow some
advances in rates, which would enable
them to finance urgent requirements
and to maintain fair dividends. The
situation of the railroads as regards
investment conditions is well illustrat-
ed by the fact that in October the
total security issues reported was only
$56,000,000 the smallest in any month
since September, 1906, and $50, 100000
| less than in the same month a year
ago. Since January 1 the total secu-
rity issues reported have been $1,z99,
100000 against $1,323, 100000 a year
ago. OF this amount railroads have
issued $7S5, 100000, as against S724,-
100000 a year ago, an increase of SCI,
100000 1t is worthy of notice.
however, that this increase was en-
tirely due to a larger issue of notes,
which for the nine months amounted
to nearly $4,000, 900, as against $780,
900 900 for the nine months of 1909.
In the bonds and stocks combined
there was a decrease for the year OF
SS3,000,000, while the issue of notes
increased more than $144 100000. This
illustrates very clearly the difficulties
in the money and investment markets
The monetary situation is not yet
entirely clear. The crisis so conf
IDENTIFY predicted in the early part OF
the year, especially by London, has
materialized; nevertheless, the i'm
mediate course is not without its
pitfalls. An unwelcome feature is the
! continued excess of loans over de-
, Eosits, indicating that the banks are
lending upon their capital and sur
plus. The weakness may disappear
in due time, but it is a condition which
requires watching, being a symptom
of overeXpansion of credit. Western
bankers are less confident of escap-
ing a money squeeze than three OF
four weeks ago, and it is quite pos
sible that they may be obliged to cal
upon New York more freely for theil
. balances. Stiff rates for money may
, be expected for balance of the year
I The Government has also been with.
drawing funds quite freely, the result
being to return from the interior. The
only real cure is a further reduction
in loans; and the higher rates TO-
tenden, in that direction. There is
/ oweyer, no reason for serious con
Germ regarding the money market, tn,
reliability being that moderate liqui
dation and a steady contraction 0
a loans for few weeks would probabl
Irectify the situation. Conditions abroa
/: are not unfavorable to this center an
, there has been considerable placin
/ of American finance bills abroad b
IL borrowers of the highest standing
o For some time past there has bee
If q growing tendency among the bank
l. to loan upon non liquid collateral, an
e this is a practice that should b
= promptly discouraged.
s In the general business there is lit
* tie change. Confidence has receive
); considerable stimulus from the fac
=. that the farmers are having anothe
. good year, but in nearly all depart
u ments of industry there is a spirit {
IL hesitation which still keeps the vo
L ume Of business below a year ag
-e The question of cost continues to b
lie the great problem in all lines of bus
le ness, not only among the consumer
ii but equally with producers and dis
tributors. Many staple articles
commerce have shown a decliniu
tendency which is hopeful, and sul
gests that the country is on the wa
to readjustment Declining prices {
not usually stimulate business unit
it is felt a settled level has been reacl
\ ed. AS soon as this is realized v
may look for more activity in trad,
st There is already better feeling
le the Iron trade as a result of the reat
KS justment accomplished there. Cote
c. goods also have been moving mo
of freely for similar reasons. Commot
ed ties prices are showing a decliniI
re tendency which should be encourage
nd as that is the surest way of restoriI
or equilibriums and reducing the cost
30 xrb 10 %, ~