The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1911-08-28

AGAIN discouraged Oy unf0yoraDle de-
velopments. Chief of these have been
an unmistakable policy Of retrench-
ment among the railroads and multi
plying evidence of slackness In gen
eral business. In addition to such in
fluences there has been a weakness
in the foreign markets attributed part
ly to nervousness over the Moroccan
situation and partly to selling OF Am
erican securities in the foreign mar
kets. All classes OF business men at
home are more or less discouraged
by political uncertainties, the prema-
ture opening of the Presidential cam
paign, the hostility to corporations and
try must face continuous tariff agi-
tation. The discovery that liquidation
has been quietly going on in Wall
street and that insiders parted with
considerable amounts of stock some
time ago has further tended to weaken
confidence. In all probability the lat
ter fact was the basis of operations
OF a prominent bear clique which has
met with considerable success during
the past few weeks.
The general investment situation
has been unfavorably Influenced by
the fact that banks, both here and at
other financial centers, have been
scrutinizing collateral more carefully
and lessening their holdings of bonds
and other securities, purchased at a
time when they had no other use for
their funds. With the approach of the
autumn trade and crop requirements,
to have their assets in liquid form.
The labor situation has, however, been
the principal cause of anxiety among
railroad managers, particularly at the
West. Evidences OF unrest have been
disclosed and rumors were frequent
of further contemplated demands for
increased wages, which the railroads
are absolutely unable to concede. Net
earnings of all roads reported in June
showed decrease of nearly 4 per
cent, and the losses since then are
probably still greater. Since the COM
panies were not allowed to recoup
their increased expenses arising from
higher wages by an advance in rates,
it is easy to appreciate the concern of
managers at the possibility of any fur
Their demands. American railroad la
Dor has already been generously treat
ed at a most inconvenient time, and
further demands at this season would
be considered unreasonable and re-
ceive general public condemnation. Re-
trenchment by the railroads is becom-
ing imperative, and as they are the
largest purchasers of steel and other
raw materials their new policy is of
much Importance in the world OF trade
and industry. Business men look for
ward to a quiet if not slack fall trade.
Eastern roads dependent upon indus
trial conditions are likely to feel bust
ness reaction more keenly than West
ern or Southern lines which rely
chiefly upon crops.
These are the unfavorable elements
in the situation. They have unques-
tionably been largely, though not fully,
discounted by declines Of 10 to 20
points in the stock market. The ad-
verse influences should, however, be
partially counteracted by influences
of favorable nature, which the pre-
vailing pessimistic temper is apt to
ignore. We are facing no crop disas-
ter. On the contrary, average crops
of wheat and corn are practically GER
tain, and large yield of cotton is the
present promise. Easy money is ex-
pected during the remainder of the
year. Congress has adjourned, for
h;a1 H. -
en-. The country will now have a
temporary rest from legislative med
ding and inquisitorial Investigations.
Our foreign trade is in excellent con-
dition, showing large export balances,
and the prospects are for continued
large shipments of both raw materials
and manufactured articles. In this di-
rection lies corrective force of no
small Importance. 1t is working slow
ly and quietly, but surely, in the di-
rection of fundamental improvement.
AS security values declined large in
terests have been accommodating stocks
and the extent of the fall, it should be
remembered, makes operations on the
short side less profitable and more
dangerous than before. There is al
ready a short interest in the market
of some Importance, which is basis
of strength and will tend to stimu-
late occasional rallies. While the gen.
eral situation is one that demands
close watching, there is no real un-
soundness, and the autumn promises
to be a period of fair activity and
considerable fluctuations in stocks. af-
fording good trading market.
The continued heavy production OF
gold the world over raises the ques-
ton as to what has become of the
enormous increase in supply which
has taken place in the last few years.
The total amount of gold held in the
great banks of Europe last week was
placed at 9501. 900 900, compared with
a493. 100000 year ago. This is an in
crease of only fS.000.00O which, con-
sidering the large addition to the
worlds supply. shows that the latter
must be absorbed in some other direc-
ton. Japan not long ago went upon