The Richmond palladium and sun-telegram., 1911-12-26

NEW YORK, Dec 26.-HOnday Qui-
ct overshadows the stock market. This
is the period for closing accounts,
stock taking and other operations Incl
dental to the close of the year. Aside
holiday trade. it is apt to be one OF the
dullest periods of the year. In the
stock market proper it is usually a
time when every effort is made to an
ticipate the effect of January disburse-
ments. This year these are estimated
at over $22O,OOo.OO0. The question
arises will the usual proportion Of this
sum come into Wall street for perma-
nent investment: There is some rea-
son to expect that it will not The main
reason is the high cost of living for
all classes. Whether this be due to
high prices. to extravaganza or to
higher standards of living matters lit.
tie. People are certainly saving less,
and as all new capital must come from
the nations savings is follows that
there will be smaller proportion ap-
plicable for investment purposes than
usual. Another element in the busi-
ness situation is that the high cost of
living compels investors to seek and
insist upon the largest returns possi-
BILE on investments. The same tenden-
cy towards better returns arsiSes from
another direction-namely. that a re-
duction in the supply of new capital
will oblige those who want it to pay
higher rates. In short. as result of
existing conditions capital is going to
command better wages just as labor
has already succeeded in doing. What
the effect of this will be on the finan-
cial situation remains to be seen. 1t is
we'll known that our large railroad
corporations have special needs for
new capital next year, and to find buy
ers it is evident that they will either
have to place them at comparatively
low prices or else pay somewhat bet
ter rates of interest. In all probability
the present year will be record-break-
ing one in the issue of new securities
owing to the exceptionally heavy out
put during the first half of the year
During the last six months the issue
have been held back because of ad-
verse conditions. Should the invest
ment outlook become more favorable
it is quite likely that there will be
flood of new offerings. The require
ments of our railroad terminal facili-
exceptionally heavy. Doubtless there
is an abundance of capital awaiting in
vestment, particularly if confidence
becomes more firmly established, but
between the necessity of raising much
new capital and the insistence of in
vestors upon profitable returns it is
problem whether there is much chance
for any prolonged rise in values.
Should the market be pushed much
higher it would materially check this
demand
General business is quiet. Conditions
however, appear sound. There is not
SO much complaint about the volume
of business as about profits. In the in
terror a rather more cheerful tone pre-
walls and bankers at the West antici-
pate moderate, but not very pronoun-
ced Improvement. 1t must be remem-
bered that last year was not a season
of big crops. On the contrary. the to-
tai yield was slightly below the aver
age. There was one striking exception
The South produced crop of cotton
far beyond expectations and much too
large for current requirements. Some
authorities estimate the yield at fully
100000 bales more than can be pos
sibly consumed. The result is an abb
normally low price for cotton. OF
course, there will be sharp curtail-
ment in acreage during the coming
spring, and the cotton left over must
be carried either by the grower, manu-
facturer or speculator to make good
any possible deficiency next year. The
low price of cotton is naturally seri-
Gus disappointment to the South. The
losses from this cause, however, are
evidently being exaggerated, and ac-
cording to the report of the Depart
ment of Agriculture will not aggregate
much over $15O,OOO,OOO compared with
last year. That crop, however, was a
record one in value, and this years
crop in value will probably be much
above the average. So all stories of
Southern losses and consequent agita-
tions should be received with cores
ponding reserve.
The money situation is reasonably
satisfactory. Some slight stringency