The Birmingham age-herald., 1915-05-01
BIRMINGHAM TRUST MONTHLY LETTER ON
 TRADE CONDITIONS
Is Much More Optimistic. Gross Earnings of Rail- roads Give Cause for
 Encouragement

The general letter on trade condi : tions and a business forecast for the month of May, issued yesterday by the Birmingham Trust and Savings com pany follows:
 Figures representing business totals may now be presented with very little explanation as present figures compared with those of few weeks ago speak plainly for themselves While some lines of trade are enjoying almost unboundee prosperity, others are doing just nor ma1 business and still others are bare ly existing. This condition will proba- ply continue as long as the war lasts, after which business should even up and lines which are now dormant. or at best moderately active, should then resume their normal state.
 Bank clearings for March were 13,S43 million dollars compared with 14,- 253 millions year ago, decline Of al most per cent This decline, however. is fully accounted for in the operation of the federal reserve banks which re- duces the total of bank clearings.
 "The business mortality for March in cluded 1885 failures compared with 1862 a year ago. The total liabilities of these failed concerns were 26,777 thousand dollars compared with 23,S76 thouand dollars for the concerns failing in March, 1914 The total assets of the failed concerns this year were fully 60 per cent of their liabilities. while the concens which failed in March, 1O14, had assets of only 50 per cent of their 1f~I.; fpf.e therefore from the increased number of failures was no more this year than on the smaller number of failures last year.
 Creating Credit Balance
 with exports ranging from 250 to 300 million dollars each month and inn ports running between 100 and 125 mil lion dollars per month we are building up an enormous credit balance abroad. There is no evidence that this balance is being paid through the sale of Ameri- can securities held abroad, and in fact those close to the situation believe that foreigners are now buying practically as many of our securities as they are selling and that their holdings have probably not been reduced since the war began by more than a billion dollars, still leaving perhaps four billion dol lars of our securities owned in other countries. Only small proportion of this foreign credit is being paid to us in money as our imports of gold in Jan uary in excess of our exports amounted to only about six million dollars, and in February less than 12 millions. Our ex- cess of gold exports last year mounted to 165 million dollars. Our silver ex- ports in February were over three mil lion dollars with imports over two mill lions, leaving favorable balance of | N Altogether for this year to date we have surely created a favorable balance still unpaid in excess of 500 million dol lars. Any estimate of what this balance will amount to by the end of the year would be merely a guess, but we'll known economists are estimating the net favorable trade balance for 1915 at all the way from one to two billion dollars. Surely the first figures would be a very conservative estimate. This balance must come to us sooner or later either in the return to us of our own securities, in increased imports or in gold. In the natural course of business a portion of it will be paid in each of these three ways.
 Tn the reports of the railroads for February we should find real encourage ment. Gross earnings were 211 million dollars, compared with PIP million a year ago, decline of less than l per cent, while net earnings were 51 million dol- lars, compared with 39 millions a year ago, gain of nearly 12 million dollars or more than 30 per cent. While this Feb ruary comparison is with a very poor February in 1914 yet the reduction in operating expenses for February this year | of nearly per cent or more than 13 l million dollars indicates that railroad arrangements are making real effort and an enective one to carry over the better season which must come to them | very soon They are now enjoying some 1 increased freight rates and will prob- | aby be allowed still further advances
 during the year. These helps together | with reasonably good crops this year
 ought to put the railroads into normal
 condition again and bring about an active , demand for their securities. The econo-
 mics in opera ion shown in the February ] statements were made up largely of the postponement of the purchase of the
 usual amount of equipment. For the first l three months of the year equipment pur- l chases included 9OOO cars and 206 ocomo- | tives, compared with nearly S2,OO0 cars and S49 locomotives for the same period last ! year.
 In Iron Industry
 Tn March the production of pig iron
 was 2,064 thousand tons compared with 161o thousand tons the previous month
 and 2SS thousand tons in March of last year. There were, at the beginning of the month, 1sl furnaces in blast with a daily capacity of nearly n thousand tons compared with 176 active furnaces a
 month before. with daily output of 6;
 thousand tons. An increase in output of nearly 45 per cent has been made since
 the beginning of the year and the actual rate of output has been increased from
 IS million tons when the year opened tc 26 million tons at the present time The great bulk of this iron is going into steel Il 'The unified tonnage of the Steel ccc,
 poration on April 1 was 4256 thousan, tons compared with 4654 thousand ton.
 a year ago. The corporation and tn. principal independent steel companies ar, operating at an average rate of 70 pei
 cont of capacity while in the Pittsburg
 Young stown section most of the mills ar.
 at nearly so per cent of capacity. Tn,