Evening star., 1913-11-02
STREET IS HUNGRY
FOR UPL|FT NEWS
Market Responds to a Hint
That Railroads May Get
Rate Increase.
VALUES NEAR BED ROCK;
FURTHER DROP UNLIKELY
Lowered Earnings of Railroads
Have Largely Been Discounted
In the Quotations.
By w. G. NICHOLAS.

By w. G. NICHOLAS.
| NEW YORK. November 1-Within
narrow limits the stock market is in a
tever OF uncertainty. Any medical stu
!; dent looking for cases of acute nervous
ness TO study would have had the time
OF his life in Wall street during the
| week everybody has been nervous.
Most OF the professionals have been up
/ set by the persistent refusal Of the
market to make sensationally new low
| prices on the bad news that has been
published.
| There has been flood of disquieting
news Thursday morning the financial
pages OF the newspapers recorded that
| the earnings of the United States Steel
Corporation were some $3,OOO.OO0 below
expectations, that the earnings Of the
| Union Pacific for the three months end
| ing with September showed a decline
| n the net of a little more than 81. 5O0 600.
that the earnings of the Southern rail-
way for the same period declined sharp
ly and that London was growing be-
cause American tinanciers had engaged
$2.VUo,OUO In gold in London Tor import
into the United States. All of this news.
from the viewpoint of the SPECTATORS,
was bad news.
On the same day single item Of good
news was published. 1t was that Chair
man Clark of the interstate commerce
commission in a speech had said that the
increased efficiency demanded from the
railroads would eventually result in In
, creased cost to the shippers. Such was
the technical condition of the market
that it disregarded the bad news and
hardened on the somewhat vague re-
mark of Mr.. Clark. 1t is fact, how
ever. that since Mr.. Clark made his
ma 6aoidadlU haffar
feeling is developing, and the prediction
is being frequently voiced that dis
tinctively forward move is making for
permanent peace between hitherto bat
| ting factions The Clark speech was
quite an important market incident in
the recent proceedings.
Steel Earnings Not Bad.
The statement of earnings Of the
United States Steel Corporation, while a
disappointment in a way, was still the
third best statement for the third quar-
ter of the year ever put out by the cor
poration. Net earnings of $3S, 10000
| for three months are impressive when
regarded by themselves. OF course they
are not so impressive when compared
with estimates that ran in some cases
| time the earnings Of the corporation
| would be considered to be eminently
satisfactory were 1t not for the feeling
that from now on there may be further
conraction of the steel business and
consequent falling off in earsings for the
balance of the year.
But IL the railroads were to be favored
| with an early increase of freight rates,
the buying from the railroads alone
| might conceivably turn the tide Of the
earnings of the steel corporation from
the present downward trend to still
| higher figures. This might happen dur
| ing the last quarter of this year or dur
ing the first quarter of 1914 1t may be
said here that German steel competition
under the new tariff law does not look
more than one-third as fearsome as 1t
did a few weeks ago. The Germans are
making a lot of figures for American
consumption, but they are not, thus far.
making much steel for us. Their figures
will not hurt us if their steel does not
come here
It is generally conceded that the state
ments of earnings put out by the Union
Pacific and the Southern railway are sam
pies of earnings that are likely to appear
for the various railroad systems for some
little time to come. There is no question
at all now but that American railroad
earnings fell off during September, and
the same Is true of October So state
ments Of earnings are apt to be poor. But
at the same time it must be remembered
that the stock market has discounted
some pretty poor statements by the de-
clines. Stocks are always low when the
dividend return on them Is conspicuouSly
above the rate commanded for money.
Railroad stocks are now down to a point
where they yield the investor better than
6 per cent in great many cases. Money
is loaning time at from to 5k per
cent and the call rate is around per cent.
Unless there Is to be a complete collapse
of our business machinery there must
come readjustment. and as money Is at
about normal rates for this period of the
year 1t seems to students of such things
as If the adjustment were most likely to
come from an advance In the price OF
stocks to a point where their dividend
yield will about balance the money rate.
or course, in boom times stocks go SO
high that they yield. in many cases. only
3 or per cent. Nobody expects anything
like that to happen for a good while, at
least.
Gold Fails as Tonic.
Gold imports usually act as a tonic on
business. The engagement OF 100000 In
London for import this week did not act
as q tonic. Gentlemen whose business 1t
is to watch the International money mar
ket said that when New York engaged
that 100000 in competition with the
Bank of England the British lion let out
roar that was plainly heard from
Threa0neeQle street TO wall street, ana
there was a prompt suggestion that the
Bank of England might make another ad-
vance in its minimum rate of discount to
prevent any more gold being shipped to
New York. The Bank OF England rate is
now 81 per cent. and If it is advanced at
all it will he advanced to per cent The
latter rate has never been applied eXcept
In times OF great strain, and New York
bankers certainly do not want to see the
old lady of Threadneedle street get so
fussy that she will tie up her purse
strings entirely. which is what b-per-
cent rate would mean. There will be. !
therefore no immediate flood OF gold from |
England to the United States It is doubt |
full If we take any more gold from Lon |
don until after the first Of the year un- |
less 1t be for the purpose OF reshipping 1t !
to Canada. where cold may be needed be- |
tween now and January l.
1t is going to be very interesting to |
compare the figures of our foreign COM |
merce for the third quarter OF the year |
with those for the last quarter. During |
the third quarter which ended September |
20. the old Payne-Aldrich tarin law was
in operation and during the last quarter |
the country is under the new tariff law. |
These comparative figures will. of course. |
not be available for some time yet The |
foreign commerce figures for September, |