The Washington herald., 1912-02-04
The situation.

We said several weeks ago, namely, on
December 22d. when business had taken
on decided activity. that:
I'VE are approaching time Of year
when business usually lags, and this,
in connection with the fact that some re-
action is always due from a squirt in
trade, will probably later on halt the
unusual activity In iron and steel for
the time being. This should be regarded
as natural, but many people will at once
attribute IT to the fact that the beginning
boom has petered out. Unless something
quite unfavorable occurs. however, we
would expect to see activity again resum-
ed later in the spring months
We are now passing into the period
to which reference was then made. Cen
eral business has slowed down cousid-
erably. This was TO have been expected
for two reasons. First. because OF the
almost invariable dulIness accompanied
by decline in the stock market, which
customarily takes place at this season.
In fact. for the last seven years. with one
exception, this decline has been the rule.
The exception was in 1905-a year of re-
covery not faced with a Presidential
election, but with the candidate safely in
office and supposed to be, alas! perfectly
safe.
The second reason is that considerable
acceleration in business. when new i'm
petus Is starting. must be followed by
temporary reaction, and the rapidity Of
the December upstart is now having its
perfectly natural pendulous lulL
steel Earnings.
The quarterly statement Of the Steel
Corporation showed earnings OF SO. .1O5.ll5.
which figure was beyond any expecta-
tions when the matter was discussed be-
forehand.
Indeed. as low as SIS. 900 was freely
predicted in pessimistic quarters or where
bear commitments made such an estimate
agreeable About 80, COO 900 was the aver
age estimate. To bring about the re-
suit for the quarter OF 81. l05.Il5, depre-
citation charges were reduced about 80
per cent from the preceding quarter.
It IS fair to conclude that these figures
OF the last quarter will be low for some
quarters to come, because prices during
the period were the lowest in years. IT
must be borne in mind. however, that
many orders have been taken for future
business at these low figures Bat the
better showing in prices during January
win help to swell the earnings for the
first quarter Of this year II. as is ex-
pected, these prices are maintained
The untitled orders on hand December
81. 1911, were sos. .T6l tons-an increase
of l.FI3,+A tons from the quarter ended
September 90 1911, and an Increase of
2,no.OO4 tons from the quarter ended De-
cember II. 1910. Taking this volume OF
business as an index of ebb and flow, II
will be seen that the trend a year ago
on the first OF January was downward,
while this year II is upward.
The total surplus of the Steel Corpora
tion is now S16S. SIS So. This is quite a
tidy sum and a pretty good guarantee of
3 per cent on the common stock indefi5
nitely unless some great change takes
place. The surplus includes Sa50OO. 900
paid in at organization and the total
surplus has increased steadily since 1904,
when It was around 100000.
Smaller Concerns Feel the Pressure.
The failures in January. as reported
by Dun, show an interesting condition.
This pertains TO the fact that. while the
total number OF failures d.SyO was great
er than last year Q,66O and the liabili-
ties were much less. namely. 81. 900.
compared with S240Oo.O0O for the month
Of January a year ago. vet the number
OF large failures OF 10000 and over
showed a great falling of. while the
smaller failures. less than $40. 600. showed
a very large increase In number. This
predominance OF the smaller failures is
the interesting part of the months show
ing. In other words, in the long stretch
of hand-to-moUth business. without