The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1913-05-07
THE BUSINESS OUTLOOK.

1t is a somewhat peSSimiStlc letter
| that Henry Clews sends out this week.
Conditions in the money market, he
| says continue unsatisfactory. Capital
| cannot now be had for new enter
prises, except upon almost exorbitant
terms-6 per cent. and over being paid
| for short term obligations by some of
| the largest and strongest railroad and
| industrial corporations. Even high
grade bonds are selling on a per cent.
| basis and over, and New York state is
contemplating a loan upon which it
probably will have to pay 4 Il per
cent
Interest rates on permanent invest
ments have risen % to 80 per cent. in
the last four or five years.
Quoting from the letter:
'"This martial exhaustion of the sup
ply of capital, or the advance in in
terest rates, has also a secondary eff
feet, the outcome of which is as yet to
be seen. 1t means the postponement
of many loans and issues which in
turn will cause delay in a number of
important new enterprises. Such de-
lay will affect the demand for con-
structive materials. especially iron and
steel; and a general slowing down OF
business must follow which Will in due
course of time lessen the demand for
labor AS to how far this tendency
will go, it is also premature to predict.
Fortunately, a slowing down process
is self-curative. 1t will offset any con-
gestion in securities; weak spots will
be eliminated; the country will have
a chance to grow up to any overex-
pansion, and in due season the way
will be paved for a substantial re-
covery.
Railroad earnings are much less ia
vorable than in the first quarter of
the year, the returns on 80 roads dur
ing the first half of April showing a
loss compared with last year. while
the previous months were showing
very satisfactory increases. OF course
the floods were partly accountable for
these losses, but railroad returns gen
orally speaking, both gross and net,
are less satisfactory"
In further discussion of the rail-
road situation he says:
The railroad situation is further
complicated by the continued demands
of labor. Now that concessions have
been made to engineers and firemen, |
corresponding allowances will. have to |
be made to conductors and trainmen. |
that if granted would cost 1000, 900, |
following the increase of $50, 100000 |
granted in 1910. What with increased |
operating expenses, decreasing traffic |
and the growing difficulty of obtaining |
capital at reasonable rates, the posi-
ton of the roads is an unenviable one,
particularly for the weaker class.
There is some encouragement, how |
ing together and propose to ask the
interstate commerce commission for
power to advance freight rates per
cent. Their request should have an
impartial hearing. The present is not
road rates when business threatens to
of some of the railroads may become
continue without invoking some sort
of crisis We must either have ration
al and fair regulation instead of one
sided regulation, as at present or the
country will face the alternative of
government ownership much sooner
than expected or desired.
That there are riffs in the clouds
the business sky is
pointed out in the following presenta-
ton of the other side of the situation:
The most encouraging element in
the outlook is the crop situation. Thel
prospect is for large yield of winter
wheat, and the soil is in excellent conf
dition generally because of an album
dance of moisture through the spring
which is the most important