New-York tribune., 1910-06-05
ALLAWAY'S REVIEW

Wall street has had fevsrish week.
at times there has been effort 10 naksis
appear that panic conditions were exist
ing This was foolish Tn so far "a
actual Intrinsic. genuine business con-
dItions are concerned. the country is al
right: what is troubI4some-Nhat - tss-
mendOusly effective upon the BAD side
just nOw-is that our biggest CORPORA
tions prefer 20 - deceftfut IS over and
over in this review has been declared
the United States steel Corporations
example il one rot merely 70 b. followed
but is such an -exampIs that n ignore IL
is to invite suspicion and trouble. Open
accounting fs not merely become rd5l-
ity. it IL here 10 stay--to control
Every day We have railway reports
from the very greatest properties. sfog-
ing large gross earnings Increases. %
which are attached net earnings d.
cresses- The public Is expected 20 a..
eept this sort Of accounting a. fair CON-
piete and final The public won't do any
such thing
Rega rdIess Of What may be reason far
these extraordinary exhibits. regarrIIess
Of " hat railway niana gers may con@lrIer
proper. the gross increases. the net do
croases - so generally uniform -- upset
confidence in the good faith ~ railway
bookkeeping. Undoubtedly IL iz trus
that railway administration suffers trs-
mendous new expenditure Labor IN
higher. All materials are advanced
NC.f . a~~- ~.I~.-
had this year ar last years cost Ard
upon this account. ss has been contfnu-
ally urged in this review. the expenses
of our corpora tious are running 50 FAR
beyond past records that only verv suh-
stantial Increases in transportation
charges can afford protection. Advanced
traffic charges are necessary If going
dividends are to continue
Industries and general business main
tain high levels The large fnc7easss n.
the gross earnings Of railroads show frat
Shipments Increase in volume. That
these increases disappear in the NET re-
turns cannot be explained By anything
like hard times. for there are no hard
times outside Of Wall Street Increased
dividends and Increased operating ev
penses are no doubt bearing heavilv upan
railroad earning apacity-irTespactive %
bookkeeping methods in the net figures
made public-pcssibIy 2 desire as far "a
possible to Justify 90 the public the pro-
posed increase in freight rates Tha.
railroads cannot be prosperous In pros
porous country is an anomaly
However. Wall Street is In no mood "a
consider any cheerful side Of t5e auAs-
ton 1t is simply in a state Of hysteria
over the action Of the government seek
ing to curb the assumption Of a rbftrarv
authority by the railroads And the IN
easiness spreads from the Stock Ex-
change 70 thousands OF shareholders.
causing heavy liquidation and forcing
quotations down swiftly and seriousir.
There is no sign that this wave Of double
and dist-ust Is su5siding. on the con-
traTy, M ~ the very end Of the week. 2
sweIled higher and hisher-the little ir-
significant rally in the Saturday closing
hour rejecting nothing bur the taking
Of some profits on the short side Tia
present movement seems nov here near
an end.
Most disturbing of the business els-
ments in the current situation is that
wherein the railroads are resembling or-
ders given fer equipment One conspiFu-
Gus equipment company advises conf
dentiaHy that upward Of 100000 %
orders have been cut already. These
are tremendous figures. They sound like
exaggeration. Yet it Is an important
officer who quotes them Such = cor
poration as the American LOcomeavs
Company has naturally 70 expect This
sort of experience when sudden bad
times come Whirling. 4 nov ioComotirs
is railroad luxury. In times Of pros
perity il is the last thing ordered. IN
times Of recession and difficulty and
necessary economy its order is the first
that Is cancelled
American Locomotive stock 1uotafisns
have suffered substantially This ves,
by reason, doubtless. Of the exceptional
situation The head of one Eastern
trunk lire SAYS hts company has can
celled- postponed Penditures Of Ss.-
coo. 900 This may be regarded fairly ss
-representativ orders FOR Loo ouotives
are eliminated by wholesale
Another matter OF undoubtsd imp6r-
tance is that under this new regime-ot
railroad economies comes sharp halt-t,
the movement toward eIectrifcsttau-
What this means TO the great elscr-ifr-
ing companies. the General Electric ard
the Westinghouse Electric. can hardly bs
overestimated. In the WestinghOuse ST.
uation there is unfortunately the further
disturbance of disa Ereement among tls
C0mpany's managers. The iDtegritv-c e
George Westinghouse viii i'm the end
doubtless prevaiI-but at the moment
there are aSs3Ttive elements vtieh ar4
hurtful Westinghouse stock holds 6Epl
lUtTiusically il is worth materially uors
than il sells for. But there are Speculd-
tive relationships that may at any ti0fa
cause trouble. rs non dividend Tsytu<
stock around so IL invites outside attarS.
naturally enough. but 70 is the inside at
tack which in this particular f0st31c~ =
most to b. feared. Because there ars-Go
early dividends in sight tho speculative
contingent may be excused for opposing
it's relatively high priCe-baDSsrs Us
eliminating agci1st such stocks for Coi-
lateral This view is narrow FuttrS
Westinghouse prosperity wiz certify
something very different. Buy. Of cCgfss.
the pessimists OF the stock FXCha1ga *
mere every argument Of this soTt--asd
they sell Westinghouse Electric as they
sell American Locomotive and other
standard industTials. on tbs basis " ths
ver- worst they can couCeivs for the m
mediate present.
In the smashing OF prices ths mstsl
shares have held particularly well JHitsd
states steel common recedinS out sv01-
patheticaiiy. while even such seusftfts
stocks as Amalsamated copper ard
American smelling have shown stbrch