The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-12-03
ACTIVITY And PRosPERrrY.

There are generally several angles
| from which a situation should be
viewed before an attempt is made to
size it up approximately for what it
really is This is especially true in
J the appraisement of the conditions
that prevail in the world of trade and
| finance. Just now the people and
business men of this country are ex-
| periencing a period of exceptional
prosperity, due in the main to the
| bountiful crops and the wonderful
stimulus that has been given to the
manufacturing industries through the
increase of our exports to enormous
and record breaking proportions. But
there is another side to the account,
however, as Henry C1ews, the New
York banker points out, and he dis
| cusses it as follows:
Mere activity is too often mistaken
for prosperity. The increased cost OF
living has become quite as serious a
matter in business life as in private
life. Profits in many cases show no
such appreciable gain as gross re-
suits, and in an increasing number of
cases profits are declining and rapidly
running toward the vanishing point.
This is strikingly Illustrated in railroad
reports, which present relatively poor
net returns considering the heavy
gains in gross. Upon one of our large
systems the ratio of operating ex-
penses to gross earnings had risen
from $3.50 per cent in 1910 to 71.54
per cent in 1912. A number of roads
show similar results. For this reason
the concessions granted to the engin-
GERS by the Arbitration Boards, though
smaller than at one time feared, are
sure to be followed by corresponding
demands from firemen and other
classes of railroad help; so that the
final demands upon the payroll of the
railroads is an unknown quantity and
may be serious in amount. In the
case of the railroads the situation is
aggravated by their imperative re-
quirements for new capital and the
higher rates of interest which they
will be compelled to pay, thus mater
Tally increasing their fixed charges.
For instance, the New Haven road
had to pay practically per cent for
$4,000, 600 one year to renew $780,
100000 per cent notes, an increase
of $500, 900 in interest charges.
Like conditions prevail in many
other lines of industry owing to the
constantly growing demands of labor
for higher wages and the many other
increases in the cost of transacting
business. Only few days ago one of
the oldest fine goods cotton mills in
New England showed a loss in oper- |
alton during the year for the first time !
in its history, a result caused entirely |
by the concessions to labor. While |
this was an extreme case, it is signi- |
ficant of the trend of events. Thirty |
six Fall River mills paid only per
cent this year, against per cent last |
year and nearly per cent in 1910. 1t |
is not to be assumed that the country |
is not prosperous. On the contrary, |
not a few large industrial concerns
are still making very handsome pro-
fits. but the situation in this respect |
is decidedly spotty. and it is we'll to |
remember that our actual prosperity |
is apt to be exaggerated or misinter-
preted by the activity and volume of
trade rather than the margin of profit,
the tendency of which is to decline in
many lines of industry. Since new
capital is only obtainable from profits
or savings, the results of such a trend
are obvious