The sun., 1916-08-21
Investors Have No Cause for
Alarm, Even With Acute
Rail Labor Situation.
GOOD SHOWING OF BANKS
Decided Recovery Since juno
I, With Reserve Increases
About $42, 1000.

timatum to the railroads was read in
wall Street on Saturday afternoon bank
ers ana brokers did not Jump to the con-
ciusion that II f~oreshadowed . strike. In
that respect their opinion was not
changed BY the new development. In
some respects the outlook was cleared.
The Presidents position was stated
emphatically. and II remained only to
learn what the nnai decision Of the rail-
roads would be. That defiance Of his
wishes would be contemplated seriously
was not the prevailing opinion in circles
usually well informed. but It was sug-
eested that before yielding the railroad
representatives would make a strong ef-
fort TO obtain at least . ssmblance Of .
promise that relief might be expected
from the Interstate Commerce Commits
sion in the form Of higher rates for the
carrying Of freight and passengers.
The possible serious consequences Of
an apparent abandonment Of the arbitra-
ton principle were not overlooked. but
generally speaking It was not believed
that the Presidents action in the con-
,roversy would result in any such aban-
donment.
Arbitration "AwarAs.~
Strictly speaking. the railroads have
not been entirely satisfied with the kind
Of arbitration which has been used in
railroad disputes. Arbitration awards"
have como to be regarded BY many in a
cynical light. In several instances II has
appeared . foregone conclusion that the
result Of arbitration would be merely .
compromise, not as between demands OF
the workers and their employers. but .
compromise between the initial demands
Of the workers and their most recent
award.
In other words. the railroads made no
demands Of their own. They did not
seek TO lower the wage scale or to make
the condition Of the workmen less salts
factory. The demands were all on the
part of the workmen. and the predicted
award was something less tina the de-
mands. but always something.
In one sense the issue between the
railroads and the brotherhood has been
brought forward at an opportune time.
Never before werethe roads 30 well able TO
pay higher wages to their men. SO the
street realizes that the test which Presi-
dent Wilson demands would not involve
any Immediately serious consequences
to the industry as a whole. and that much
nay happen between now and the time
when the volume Of traffic will decrease
and the pinch OF poverty again be felt.
To attempt a prediction Of tho action
Of the stock market to-day. In the light
OF these important developments, would
be foolish. In fact tho immediate re-
Spouse of prices may not be significant.
1t Is generally believed. however. that
the technical position Of the market Is
not weak. though It probably Is not 80
ago.
Ne Cause fer Alarm.
Furthermore. the most prominent
financial interests probably would lend
all necessary assistance In case a sud
den wave Of selling threatens general
unsettlement. Consequently tho prevail
Ing feeling of those whose opinions
could be learned was that though there
might be a temporary decline the trend
soon would be upward and tina. in
vcstors would have no cause for alarm.
even though the aspect of the railroad
situation might become even more seri.
Gus than on Saturday afternoon.
Banking conditions In New York are
mors satisfactory now than at any pre-
vious time in the last six months. Since
the first Of June there has been a de-
cidcd recovery. Loans have been re-
duced more than $3.50. 0Oo. 900. and re-
serves have been increased approxi-
ma'cly sA2. 000, 900.
because Of the loan curtailment, de-
posts have fallen of, and whereas on
June 3 the associated banks reported
excess reserves OF less thar $50. 900 900,
they now have an excess Of $127. 593 .22O,
and the ratio OF excess has been In
creased from less than ga per cent. 10
almost 20 2-5 per cent. That is the
highest ratio reported since February
10 and Is less than 8 points under the
high record OF January 80.
IT may be OF interest to note that the
reduction OF loans last week was ac-
complished In the last few days. the
actual amount OF loans at the beginning
~ business on Saturday being $685.
az, 900. compared with an average for
the week Of $3,:40.052, 900. On the
other hand. the deposits were increased
as tho week drew to a close. the actual
amount Of net deposits at tho beginning
Of business on Saturday being $685.
lOl 600. compared with an average for
the week OF S3.364.243,0 900.