New Britain herald., 1916-01-29
GENERAL BUSINESS
 CONTINUES ACTIVE
Outlook, Though Good, Is Full Of
 Hazardous Possibilities
Especial to the Herald }


 week. This representative corpora ton of the steel trade had risen from pauper to prince and more than doubled in price in exactly twelve short months Much stock had been accumulated in anticipa- ton of a resumption of dividends, earnings being the lowest on record This week dividends were resumed ing touched the highest point in the history of the company. The quar- ter's net earnings amounted to S51,- 2oO,O0O, or $5,7OO,O00 in excess of any previous quarter, and compare with $1O,9O0,000 a year ago. Actual announcement of the dividend was promptly followed by general profit taking and the stock quickly fell from S5 1-2 to 92 5-S. The heavy transactions in these shares affected the whole market and started general liquidation, which was accelerated ty the intuition shares because of their lessened popularity, and by the railroad shares because of impending
 tabor difficulties.
 'tEucSSiuS INIJuoIitS.
 Another depressing influence was the continued influx of American
 securities, resulting from effects of
 the British mobilization plan. This movement, which was almost put an
 end to gold imports for the time
 being. may or may not be continued for some time to come Much de-
 pends upon the progress of the war. inf without materially depressing values is good evidence of our absorbing capacity. Only a portion of these stocks. however, have actually come upon the market; the great bulk hav- ing been accepted by our banks
 bankers and trust companies as col lateral upon loans. These large hold ings or securities consequently hang over the market and are likely to be distributed more or less freely on every favorable occasion. A tight money market, or a sharp rise in values might easily precipitate further liquidation. As the same time very considerab b1e sums of these stocks have gone permanently into strong boxes. It will be remembered in this connection that one of our leading railroad managers asserted some years ago that American rail- roads would need about one billion collars a year for several years. They did not secure that sum be- cause of adverse home conditions. Nevertheless, the statement being an authoritative one was some measure of our investment capacity. and prove that the return of foreign shares, extensive as the movement may have been, has not been beyond our capacity to handle. At the same time it's effect has been to check the flow of American capital into home enterprises; new issues in January being unusually small and confined very largely to issues for refunding obligations.
 Given Fair Chance.
 These facts show that relatively little new money is going into rail roads or into new industrials, and i yet the fact remains that Ameri- cans are willing within certain limits l to buy back their securities at com- Daratively high prices; from which 1t 1 is to be inferred that the railroads would have no difficulty in securing l ample new capital for necessary inn provements, if home conditions only 1 permitted. Our railroads must be given a fair chance, not only to make | reasonable profits but also to make the necessary en1argements. The labor problem of the railroads pre- sents some rather serious possibilf- ties. New demands are threatened W vhich if carried out, would prove a heavy tax upon their financial re- sources. Already labor secures about two thirds of every dollar the rail- roads earn, and the average wages of men have risen in five years from $62O to $S2O a year. Railroad labor doubtless has some grievances which require adjustment. Yet rail- roading is one of the best paid occu- patons in existence, and has re- ceived greater concessions in wages than in any other important division of labor. American railroads have been seriously crippled by these and other burdens of a public nature. They have just emerged from a period of sharp contraction, and have had to endure an era of severe hostile public opinion in retribution of past mistakes. Only recently did the gov ernment allow them to partially re- coup themselves for these increased burdens by an advance in rates, which has not even yet been granted to all sections. In fact, the rail- roads have been struggling for their very life, threatened by demands of labor in one direction which they have been unable to refuse, and by government repression on the other hand, denying them the right exer- cised by every other organization to themselves for increased expenses by increased charges. If the government is to continue to regulate freight rates, it would seem 70 be inevitable that it must also regulate wages, unless the railroads and the service they render are to be permanently crippled by unreason- able demands. Fortunately, railroad revenues are feeling the stimulus of