Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1914-06-30
.CLEvS' lARKE1 Letter
Nsw York. June 20 1914.

3Ss@ Ny0w 1OTh. Ouu0 g IUA1s
The shock OF the Claflin disaster
was well resisted by the stock
market and caused much less distur-
bance In the financial district than
might have been expected from 70
serious q collapse. What the Olaf
lin failure will mean to the dry
goods trade cannot yet be predicted.
Unavotdably It must cause much IN.
settlement AID possibly some liqui.
dalton In the distributing branches
OF the dry goods trade. The failure
was plainly attributed to over ex.
palsion and to the difficulties of ad.
justment to changing business con-
ditions. ThesH B. Claflin Co. was q
jobblng concern. For some years
past the jobbing trade Of New York
has been steadily shrinking owing to
the tendency of the large retailers
to buy direct SThe difficulties of the
concern were also seriously aggra.
waited by the shifting Of the
currents Of trade in this great
city, and especially Of the
business depression. It is to be
hoped that our we'll intentioned leg:
islators will take a lesson from this
failure, and realize that there are
limits to what business a bear
from sudden radical changes. Not q
few of the new laws ana regulations
are desirable and even necessary,
but they have come probably with
too much Of q rush. Largely owing
to that fact their effect has been to
impair Initiative and weaken conf
dence; thus precipitatilg incidents,
such as the Claflia disaster, which
might otherwise nave been Averted.
General Retrenchment.
That there IL a general retrench-
melt In business is beyond q doubt.
Last week bank clearings were near
ly 10 per cent less than a year ago.;
the decline being greatest in New
England and Eastern states; and for
the five months of the calendar year
the decline has been over s per cent.
Gross railroad earnings showed a
loss Of II per cent for the month of
May, and 6 per cent for the first
five months of the current year. The
number Of idle cas- is still abnorm-
ally large. The present net surplus
of cars is $4,000, compared with g.
900 a year ago. Building operations
are on a much smaller scale than
usual; and the stagnation OF the
steel trade is already unpleasantly
familiar. July disbursements for the
first time in many years show a de-
crease. compared with the previous
year. This was due to the passing
or reduction Of a number of divi.
dends, also to the smaller increase
in new enterprises; the latter run
ming at about one-half the volume at
this time last year. These facts are
stated not to emphasize depressing
factors. but simply to show that
they do exist.
Discount Trade Reaction.
There Is good reason for believing
that the stock tqmarket has pretty
thoroughly discounted trade reac.
ton. Security values have been de.
clining with more or less regularity
for more than eighteen months. AZ
partial recovery has taken place,
but stock market prices are still up.
on a low and relatively substantial
basis. There is little or 10 initiation
or over-expansion on the stock ex-
change. That body is suffering
more from REORGANIZATION than any
thing else. The downtown situation.
so far as the security market is con
cerned. is exceptionally souno. AS
for mercantile credits, they are like
ly to be temporarily disturbed by
the dry goods failure, and some in.
convenience may be temporarily
caused by necessary adjustments to
the new rsrve .1ank requirements.
Decisions Of Supreme Court.
Among the important events Of the
week were several supreme court de.
cisfons, the lnter-Mountain decision
being Of chief significance. That de-.
cision while it clarified the situation
as to the relations between the gov
eminent and the railroads, and while
the latter will now be free of state
interference on interstate traffic, still
the acknowledged constituti0nality Of
the government fixing the rate was
anything but welcome to railroad
managers. This is q power Of por-
tentous proportions II wisely used
and In a spirit of fairness to all in.
terests, owners and shippers alike, it
may be productive o much good and
tend to conserve the: stability of rail.
road investments. II, on the other
hand, the power Is used with preiu,
dice to either side. the consequences
may be anythingsbut desirable. Very
shortly the rate decision will be hand.
ed down, and the most reliable opin-
lon IS that moderate concessions may
he allowed to the eastern lines. 1t
would be unsafe, however, to be over.
confident in anticipating too favor
able a decision. Mexican affairs have
again been IN object of some anxiety,
the situation being made worse for
the federals by the taking of Zacate-
cas- by Villa. TINT Huerta must 20
by n means or another, is now q
certainty; and 1t would seem as II a
settlement might be nor promptly
reached by bringing Huerta and Car
rama into consultation for securing
q provisional government. OF course,
bitches must be expected in such diff.
hcult negotiations, and 1t will be q
long time before Mexico settles down
into normal conditions once more.
But the probability Of armed inter-
ventiOn by the United States, though
not entirely removed, Is apparently