Evening star. [volume] (Washington, D.C.) 1854-1972, 1915-07-11
Great Plethora of Loanable Funds.
Deluge of Orders From Europe
Taxes Facilities.
Special Correspondence of The Star.

| sequel to the whole story is that New
York has attained supremacy among
| the international monetary centers.
| Comparison of financial conditions
with those which prevailed on January
emphasize these excellent improve
ments, many of which seemed impossi-
BILE of accomplishment earlier in the
year. Trading in stocks and securities
can now be accomplished with entire
freedom from cumbersome restrictions,
and in the majority of cases at rates
which net the investor the highest
rate of earnings that his funds have
ever produced.
the country, and no legitimate enter
prise which can offer proper security
need be restricted in its operation. or
even in its program of expansion, be-
cause of lack of funds. January l the
surplus reserve of the New York city
banking institutions was s91.7s0,260, an
unprecedentedly high figure in itself;
today it is a little more than twice that
amount. and with no indication of APP
preciable reduction in the near future.
Last week over S270,000.000 was paid to
American investors in the shape Of in
terest and dividend disbursements,
large proportion of which represents
the semi-annual interest on railroad
and industrial bonds due July l. This
money will gradually find its way back
may be redeposited in our banking in
situations. by that amount increasing
our available cash resources.
So-Called War Stocks.
The great demand for the so-called
"war stocks due to the increased
earnings of industrial concerns that
have been converted into temporary
arsenals, has caused some of these is
sues to double or treble in price in
few months. Reports from the stock
exchange show that the increased &C
tivity in stocks has been running con-
currently with an advance in price, the
average for twenty-five industrials rep
resenting a rise of about eight points
and for twenty railroad stocks OF
little over two points.
The recent extraordinary increase in
activity and production in the steel in
dustry has been an important feature
in the commercial situation. The
United States Steel Corpoation, Tor eX-
ample, which was operating at only
37.8 per cent of efficiency in the early
part of the year, is now reported as
operating at practically full capacity.
1t is noteworthy that the steel cor
poration has not participated to any
extent in the war orders that are
flooding this country. though indirectly
that class Of business is undoubtedly
responsible for a great deal of the cor
poration's activity.
Proposed Readjustment Plan.
One of. the big problems of the finan-
cial district has been the reorganiza-
ton of Missouri Pacific. the plans for
which were announced after the clos
ing of the market Tuesday. There has
been a unanimity of agreement among
the various protective committees rep
he
rally the stockholders will have to
bear the heaviest burdens of the re-
organization program.
The plan makes a radical cut in the
company's capitalization, converting
large share of what have heretofore
been fixed interest obligations into pre-
ferred stock or income bonds.
Missouri Pacific stock has been on
the gradual decline for a year or more.
the weakness becoming more pro-
nounced when it became inevitable
that a cash assessment would be paid
in on the stock in any plan that would
successfully rehabilitate the property
This assessment is to be $50 share,
and it is counted upon to supply SAL
100000, or all Of the new cash needed
to make the readjustment effective.
holders is to be made through the sur
render of old for new securities.
Proposed Readjustment Problem.
The essential feature of the proposed
readjustment is the removal of the
necessity for the new company to carry
such 4 heavy interest load as to make
it impossible to devote any Of the
earnings to improvements.
II the plan is adopted by the security
holders the reorganized company will
start off with a reduction of $50. 552, 900
in fixed interest-bearing obligations.
This will mean a difference of $3,5S0.-
600 per annum in the sum which the
road will have to earn to avoid de-
fault.
The plan contemplates the creation
of three new classes Of securities: New
cent bonds. of which $46,923,0O0 will be
issued at the outset; new general mort
gage per cent bonds, of which S44,-
$4,000 will be issued new per cent
preferred stock or income bonds bear
ing the same rate, of which $76,75 900
will be put out, and new common stock
to the amount now outstanding. This
plan will finally remove the road from
the domination of the Gould interests
and place it in position where it will
eventually work out its own salvation
to the satisfaction of it's stockholders.
Meanwhile the policy is watchful wait
ing.
General Business one-Sided.
General business maintains a some
what one-sided condition, the greatest
activity being in the manufacture of
foreign necessities. 1t is increasing
ly evident. however, that whatever
impetus the demand for war materials
has given to those lines of business
directly in a position to benefit from
such demand, the stimulation has
spread by natural processes to indus |
tries primarily engaged in supplying
domestic wants. Bank clearings for !
May make the best showing for any |
month since the war began. Compared |
with the same month OF last year, they |
showed an increase of Ill per cent |
but this does not indicate return to |
normal conditions. for it must be re-
membered that in May of last year the |
majority of all cities for which clear I
ings were reported made an unfavora-
BILE comparison with the same month |
of 1913.
Unemployment, which some months |
ago was of considerable proportions |
has gradually ceased to be a disturb |
ing factor, many lines of manufacture |
now reporting an actual scarcity of la