New-York tribune., 1910-08-21
ALLAWAY'S REVIEW.

ket situation. Much is suggested. in,s,
esting developments forecast But u~.-
dictions are altogether unfulhIled. up -
date-the prophets all engaged in pleas
ing promises for which only vissa,
father thought.
It may be that we are at critical
money market period. Foreign exchan~.
rates stiffen. 1t looks as If gold irnport,
we're about over. Meantime we are a,
the verge of crop movement rsauir.-
ments. From Washington has come N.
assurance during the week that -.
financial situation In the West has "a
Gently been so much strengthened tha,
Ii Is anticipated that Western banks "a.
to much larger extent than usual urs1
vide the necessary funds for handIin.
the annual crop movement. II thts
proyes to be correct there will be roI,c.
relief to New York. But the same az
comes every year. and every year peters
out
Crops hold their own-no further Dan.
age develops. Good rains IN the Ws-
have relieved the drouth- II can be fai-s
ly assumed that net crop results. whfs
by no means of bumper" character. wfS
be fairly satisfactory in volume and nor,
than ordinarily gratifying in cash "a
turns TO the farmer. Under such conSt
tons there must be continuance OF pros
perity for the agricultural cOmmunitv-
q factor Of potent effect in future dsysl
opnents And this view OF the situation
finds utterance from no less an important
source than James j. HILL who has jus.
returned from a tour Of personal inspec
ton of Northwestern agricultural ANA
business conditions. But. says Mr. Hill
In summing up his opinion, Caution IA
necessary In business undertakings AZ
this time, and is being observed" This
is precisely IN line with what has been
urged in this review for some time past
Railway earnings as they come in con-
tinue to make the exhibits with which
Wall Street has become unhapplly "a
miliar-large gross earnings increases
turned into net earnings decreases Hsrs
and there are exceptions; but for ths
most part they are inconsequentiaL Soma
of the bigger systems have been ruth.
lessIy cutting operating expenses. and
thus are able rneasurabIy 20 Offset the
depressing net earning exhibit. Any
canvass, however, among experienced
managers makes il very plain that such
authorities do not believe that this sor,
of relief can be more than temporary
while il is likely TO bring results, invites
consequences that will be uncomfortable
What Is urged by these veteran Observ-
ers is that the vital element in the IN.
creased cost of railroad operation Is ad-
vanced wageS-and from no quartz.
comes even a hint of any attempt 70
reduce the wage scale. It is clearly IN
derstood by railroad managers that aay
such attempt would provoke conflict wifi
union labor, a situation with which The
transportation companies are nor pre-
pared to cope. a condition accentuasd
IN its troublesome features by political
developments. more particularly through
out the West.
It is unquestionab BILE that some rsls.
is necessary The two horns Of the d.
Iemma are increased traffic rates re-
duced dividends To increase trzHs
rates is no easy matter. despite the
jaunty assumption Of Wall Street that
they will come about as matter G
course Public sentiment is against SUN
increase. Shippers are organized al
over the country TO present their views
of the situation in the endeaVor to PIE
vent rate advances In these times Sue1
manifestation OF public sentiment can
not be ignored. That present dividelf
rates are peTilOUsly near the danger l1s
If present traffic rates are 70 COutinue IS
uainly manifest by the most casual
study of recent railroad repOTts-nOtaoY
exemplified by such great systems as &
Paul and Illinois Central. each OF which
shows surplus barely nominal after Iaa
decIarat ton of their last dividends Ia
less speedy relief is obtained there lS 70
doubt that Sailroad shareholders VIII oe
called upon to help out the situation sy
= Isv-,fl a. han
now enjoy. And all this is bound 70
bring to the front the question OF gov
ernment ascertainment of the phySlca.
value of raiIroads-hOw much in present
capitalize ton is real and how much s
water" This issue may seem chiefly
academical to Wall Street. but 70 tna
country al large it is very real There
are sections where it becomes actuaiF
controlling And from this time forward
II is likely 10 become continually mors
and more q conspicuous factor
Few facts in the railway situation at
the present time can be considered IN
qualifedly bullish- Large gross earnings
invite enthusia asm-but there the pleas
urable side of the situation ends EI-
penses stupendously expanded and pohl-
ical antagonism waxing worse and wors'
impose problems that ordinary GEMS
cannot readily solve Thus. at the oes-
the hopeful view must wait upon us
determination which this fall the Inter
state Commerce Commission will arriv'
at as 10 the fairness of bigger ualr
charges
Wall Street oraCIes have already se'-
tied the Interstate Commerce cases haYs
proclaimed that the railroads VIII g.
all they ask Wall Street is always dOiI.
this sort of thing. being great IN us pEs
liminary wisdom, settling court cases "
advance in the same free and easy r@sa
ion that Democrats are always carryls
Congress up to the time the actual WV
ing takes place. About nine times V-.
OF nine the guessing and the oo4St-'
go equally wrong.
II is curious that while Wall Stre7-
essays to bull the railroads in the lAs'
of many adverse possibilities IT locS
with an unfavorable eye upon the lnd1s
trials. Certainly American induSti's
confront no such perplexities as do :"
railroads Indeed, the premier lnduSus
Steel. maintains a remarkable hign Is'G
of prosperity. The earnings Of the Uni'S1
States Steel Corporation show no aoas.
ment as vet. nor is there any PercepGer
diminUtion of booked orders. Stee! CV--r
mon is certain 10 receive its preseh-
per cent. dividend unless the un1oreses~
able should happen. and Is more .Ss- u;
likely to enjoy extra distributions ul-.s ~
the officially announced policy o.
management. Yet in the last sI-- -
Steel common sold down very ciose