The Birmingham age-herald., 1911-08-28
CAUSE OF FALLING PRICES IS EVIDENT Many Disturbances In the
 World of Finance FORCES ARE REDUCED Consistent Rulings of Commerce Commission Brings Doubt As
 to the Earning Capacity
 of Railroads
FORCES ARE REDUCED

New York, August 27.-Renewal of the falling prices at the stock exchange last week brought with it some fresh rumors of special causes and sources for the liquidation. At the same time the more fundamental grounds for the decline De- gan to emerge in the progress of eVents' Less attentions was paid, therefore. to conjectures of directors disputes, liquida- tion of estates, the dissolution of the great industrial enterprises under decrees of the supreme court and similar grounds for the persistent selling which has occurred. The deterioration in the grain crops, prep aration by the banks to finance the cot ton and grain movement, pressure from foreign financial centers caused by poit- teal disturbances, further check to the country's trade revival and the develop ment of controversies between the rail- roads and employees took more appro- priate places in the calendar of causes.
 A policy of reduction of the working forces took shape on the part of various important railroad systems The extent to which this move is to become general remains obscure, depending partly on diff ferences in the treatment of the prob lem of economy of operation by the va rious transportation companies in the past year The movement is sufficiently wide spred, however. to indicate that neces- sity for retrenchment is felt and to point to the conclusion that business is slug gish and that confidence is lacking in the revival.
 h. 4, commission against the contentious of the railroads and in favor of reductions go to increase doubts of the earning ca pacity of the companies. The likelihood that they are to be confronted with labor difficulties increases the sentiment The contrast of these conditions with earlier expectations is shown by the fact that the interstate commerce commission, in refusing the petition of railroads for general advance in freight rates, predict ed in February that by July 1 earnings of western roads would reach the high point of the previous year.
 While allowing that a failure of the prediction might give ground for recon- sderation of the petition of the roads. the commission added that '.it might ap- pear with reasonable certainty that car riers have to exercise proper economy in the payment of wages and the general conduct of their business
 The railroads now seem to be preparing to meet this requirement.
 The accepted authorities in the Steel and Copper trades report similar feel ing of doubt in these trades over the fu- ture. Current production in the steel trade is outrunning new orders and fur ther cutting of prices of finished steel is reported. General commercial lines seem to show activity better sustained and more confidence in the betterment is reported.
 A professional origin is suspected for much of the selling of stocks owing to the great congestion of activity in the centers of speculation. especially Union Pacific, United States Steel and Read ing. That congestion is significant un- doubtedly, but the enormous loan con- traction by the New York banks which has accompanied the decline since the first of the present month goes to show liquidation of long accounts in abundant to short selling by bear pres sure. The extent of the decline. the re- lation of prices to dividend returns in many cases and the added strength of the banking position achieved from the liqui- dation are recognized as sufficient to meet severe demands. Any considerable fur their ddecline would be regarded as symp- verse to prosperity.
 The adjournment of Congress left the assurance of fresh activity in tariff re- vision the coming winter. Another in- quiry into trust control provided in Senate resolution also promises further agitation along a line not relished in the financial district