The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1913-11-03
Steel Corporation Men Seem
to Anticipate Reduction
of Profits
A RAILROAD RATE
INCREASE DESIRED
Canadian Pacific Stock Always Closely
Watched for Indications of Eu-
ropean Financial Con-
diti0n
By HOLLAND

closely associated with the United States
steer corporation said to the writer that
II might be several months before the
permanent effect of the new tariff upon
the American steel manufacturing indus
tries would be determined. He looked for
some railing off in business In the autumn
months and he was inclined to think that
the ultimate effect of the new tariff law
might be permanent reduction of prof
JUS earned by those engaged in this in
uustry. He thought that the steel men
Oh the United States should be prepared
10 accept smaller profits upon their in
Yestments than the average profits gained
IN recent years. There are some reasons
Tor presuming that this Is also the opin-
ION of Henry c. Prick. of Judge E. H.
Gary and of President James A. Farrell
The recent quarterly report of the
United States Steel corporation tends
although in a very slight way, to confirm
THIS opinion. In fact, it must have been
with some knowledge not only of inlme-
dlate but of prospective conditions that
Judge Gary spoke recently at Chicago
IN what seems to be really a hopeful state
OF mind so far as the future is concerned
so also recent statements reported to
nave been made by President Farrell sug-
sest that he looks for some recession in
the iron and steel business during the
remainder of the fall and all of the win
ter months but that he is inclined to
think there may be good revival of the
industry noticed early In the spring.
Effect of Railroads
LII tho railroad corporations of the
United States found themselves in posi-
ton to purchase needed equipments, rails
and other articles in large amounts, these
purchases would tend greatly to stimulate
renewed activity in the iron and steel
business.
since the quarterly report of the United
states Steel corporation was published a
lew day ago there has been opportunity
20 give 1t careful study. In banking cir
Giles in this city the report is regarded as
not dscouraging one, but on the whole
as indicating fairly good business activ-
tiles IN the United States. Bankers would
not have been astonished had they learned
that there had been heavy falling on
IN orders because consumers preferred
10 walt to see whether the expected re-
auctions in tariff rates would be followed
py sympathetic reductions in iron and
steel prices. Yet there does not seem TO
nave been very large procrastinatlon on
the part OF consumers, for If there had
been the report of the September quar-
ter would probably have shown much less
earnings than the figures reveal Bankers
say that net earnings OF approximatelv
%Ss,SpoO constitute. remarkably good
record The business upon which these
eatnings We're based was in progress at
IA time when the tariff bill was under
discussion and when also radical and
fundamental change in our banking and
currency system has been agreed to by
the members of the House banking and
currency committee and later by the
members OF the House of Representatives
itself. These two factors should have
considerably Influenced general business
ana undoubtedly they did. But some of
the depression has been made good by
other influences, especially by very great
business ana industrial activities which
are reported to prevail In some parts
or the west and upon the Pacific coast
one feature of the report has been
spoken Oh with qualification by bankers
and that Is that this corporation was
I@ssy's o,tlne first three-quarters OF the pres
torney white q rn approximately 10 nor
velopment tomo common stock. 1t is nor
man will after - there will occur any
credit some off n the final quarter of tne
charges of ggpt 'ciapls to reduce this figure.
tn eh wrswam > Hon ful Sign
,,a ~ e,,s; loss - re engaged in the
III. No Pc 'ndus are persuaded that
"a :, hterS ie commerce commlss on
saiN I'll consent the Increase in rates
asked for by the eastern railway lines OF
, per cent that V i'll of itself materially
stimulate industry for 1t will tend to en-
able the railroads to obtain much needed
lunds. me hope is becoming very strong
that recent action by the Interstate COM
meree COMMISSION points to favorable
consideration by that body of the an
plication of the eastern railroads for in
crease in rates.
There was general comment In business
and banking clrcles in this city over the
comments of Chairman f.. Il. Clark of the
Interstate commerce commission care
ful study of the quoted remarks does not
tend to justify an expectation that the
commission viii grant the increase in
railroad rates asked for. On the other
hand 1t has been frequently said since
these remarks were published that thew
do not justify the belief that the COM
mission will not advance rates. The phil
osophy expounded by Chairman Clark is
Identical with that which has recently
been expounded by James ]. Hill, by
President William c. Brown Of the New
York Central, by President Ripley of the
Atchison and in fact by almost all of the
executive forces in control of the greater
railroad systems.
1t is said here that Mr. Hill with en-
tire consistency might have Incorporated
into anyone of his recent addresses the
statement made by Chairman Clark in
these words "An ideal transportation
situation in the United States can be at
tanned only by large additions to the IA
cilities and great improvements in meth
DDS" These added facilities can be Sc
cured only through expenditures of sur
plus earnings or from expansion OF credit
But in any event the total cost to pur-
chasers of transportation would be in
creased This comment is only another
way of putting what President Howard
Elliott of the New Haven system has
upon several occasions recently said
A Good Barometer
II anyone should scrutinize the table
containing the quotations of stock ex-
change prices with view of learning
how the stocks OF various railroads are
~ regarded he would discover that there
.Nlre only two railroad companies whose
locks are quoted in excess of $500 share.
lne of these is the Lackawanna but
THAT ID railroad whose handsome pre-
mSum IL due to exceptional reasons. The
other is the Canad an Pacific. On the day
after the announcement that the bank
}of Germany had reduced its dividend rate
+ almost everybody familiar with stock ex-
I change transactions gave close heed to
the quotations for Canadian Pacific stock.