New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-07-12
BRIEF NOTES OF FINANCE
paragraphs of Current Interest
for the Investor.

IN" .io, of credits induced by liberal
eIy Of available capital presents
sSf,t nicture than the instances OF the
oefsr in review. The REIMBURSEMENT
P,aa through which this country is pass
the restrictions of legislatures and
me- ne political organizations formed for
,,nnosed protection Of the public, all
tendency to breed ultra-conserva-
which will be reflected in the
.-.,re operations of corporations, both
ia and industrial, in the United
a. lust how far this conservatism
"I 40 cannot be determined until ex-
..r,ence has recorded the answer. 1t Is
I,sasnt that capital will be reserved and
49, the broad extensions and the many
.,.r,ents Of chance heretofore taken Will
- eliminated and business will settle
snup 10 a smaller element of risk, with
as,nraIlv a proportionate decrease in pos
s'hle profts. To what extent such poll
49,, u.;lI affect. the stock market or develop
,he bond market is question OF interest
:, tho purchasers Of securities. for. as
hsssd on precedent, stocks look very
Nan at this time. During this .pcriod of
a,s,urbance caused by all these efforts OF
0o,t,cians and reformers, the public will
~ held in suspense regarding investments.
generalization may scribe some purpose,
M, much Of IL is due to misunderstood
,ns and its effect must necessarily be
harmful.
Erie Railroads Position.
The withdrawal OF the Erie from the
corornerce Committee of Managers, which
q conducting the negotiations with the
,rs,nren and conductors on the wage
Orsstion. calls attention to the Eries por
s,t,on and its prospects. 1t is unqueston-
shly fair to assume that the official posi-
tion taken by Erie was warranted by It's
current finances, Notwithstanding that
the last year was a record one for the
connauy. both in gross and surplus. For
the fiscal year just closed the gross earn
ings of the Erie were 1920. 900. and in no
previous year have they exceeded $1,000
90. his estimated that the surplus savings
will approximate SS0OO,000. where former
" they never exceeded $5.0oO,oo. During
the last year the Erie has expended S0,-
G0OO in improvements and betterments,
NJ which only 900 was financed by
the capital account; consequently the bal
ance must come out Of the earnings, and
not only last years surplus, but at least
a part Of next years will be required 10
pay for the Improvements not included IN
the capital account. II is estimated by
President Underwood that the company's
carrying capacity will be increased 80 per
cent by the improvements and enlarge
ments to the service, and as an act of
conservatism the road desires to see
itself safely beyond the danger line, es-
pecially as the outlook for new financing
by railroads is not encouraging.
Crossing the Bridge.
The present investment market offers
few opportunities to the railroads for sell
Ing securities except in the form OF short
term notes. Many roads have resorted to
this expediency. and that the end is not
in sight IS indicated by the issue this
week Of 100000 one-year per cent
notes by the Northern Pacific Railroad.
Heretofore the Northern Pacific has sold
edch year DlOCk OF us treasury SecuTl-
ties 10 cover the cost of Improvement
work but this year the, money market
made it necessary to resort TO short term
financing in order to cross the bridge
Until investment conditions improved suf-
fciently to warrant bond issue. Rather
than sacrifice long term issues it is bet
ter and more profitable for corporations
IN g.
for year, and the high rate Of interest
makes these short term issues profitable
to investors who have been able since
1906 with one or two exceptional years. to
feinyest their income from maturing notes
a. as good rates as they formerly en-
joyed However, the money market which
calls for such premium Is not a healthy
one