The Ely miner., 1915-09-10

for the top notch. A noted trade
i journal says:
AS long as affairs run along
smoothly, the average busines:
man pays little attention to eco
nomic laws and the workings o.
the financial system. But with the
disruption of all trade organization
that took place year ago, the at.
tention of the public has been call
ed frequently to the various
obstacles which have prevented the
business machinery from running
smoothly. When the war became
a fact, with the end of last July, all
other considerations relating to
business deferred to this greater in
fuence and retired to the back
ground. The tariff law and other
legislation, largely responsible for
condition of severe industrial de-
preston prevalent for year prior
to the war, was almost forgotten in
the light of this appalling calamity.
On July 81 the New York stock ex-
change closed its doors, following
the example of all other great
security market of the world. The
metal, cotton and other exchanges
did likewise.
Our own country, while not a
participant in the war, nor threat
ened with the necessity of partic-
lipating, suffered with the rest.
London bankers in their first fright,
withdrew credits that had been
standing for generations. They
asked American bankers for i'm
mediate gold payments that in the
ordinary course of business had al
ready been utilized. Sterling ex-
changes rose to unparalleled
figures. and New York City joined
in world wide panic over the ex-
changes.
Industry and trade quivered
under the shock of financial panic
Consumers bought from hand to
mouth" No one cared to commit
himself even a short way into the
future. Building projects literally
were suspended in mid-air. Fin
ancial accommodation was almost
impossible. Thousands of plants
curtailed their operations or com
pletely closed down. These con-
ditions were intensified toward the
close of last year. Millions of men
were thrown into idleness. Few,
if any, of the captains of the in
dustry could see light ahead and
predictions were general that world
wide depression would continue to
exist while the war lasted. Many
companies in the last. half of 1914
grew so pessimItic as to force a
readjustment of wages downward
This was not the case with the
Steel Corporation nor most of the
other leading iron and steel COM
panies. although their financial re-
ports showed the poorest earnings
in their history.
1t is of interest to recall state
ment made by James A. Farrell,
president of the Steel Corporation,
to the Daily Iron Trade, Aug. 5,
1914. He said in part:
No one can see what the full
effect upon the steel business of
this country is going to be. Certain
it is, steel imports from Europe
will cease; and with the passing of
the necessary legislation by our
government, a number of additional
vessels will be brought under the
American flag, and 1 believe there
will be gradual resumption of ex-
ports which will assist in restoring
the equilibrium of foreign exchange
and relieve the congestion of mer-
chandise in transit at seaboard
Prices on all iron and steel products
are likely to be affected, and quo
tations made on actual current
business. do not look for an un-
usual advance in prices, but rather
a recurrence to normal values more
commensurate with the increased
cost of production. The funda-
mental conditions of the country
are sound and point to an increase
in domestic business.
Mr.. Farrell's position as author
ity on iron and steel conditions,
and particularly on export trade,
is such as to make comment super
fuous. 1t is evident now that he
was conservative in his predictions,
but it was after this time that the
corporation experienced the hard
est times and the leanest earnings
in its history. During the third
lquarter, earnings fell so low that
the corporation reduced its dividend
on common. Conditions went
from bad to worse. In December
the average mill operators of the
corporation were under IS per cent
of capacity. The showing was so
poor for the last three months OF
1914 that the corporation manage
ment suspended the common divi-
dend altogether.
| Toward the end of December the
turn came. People began to
realize that the world was not com,
ing to an end just then. Prices oi