New Britain herald., 1916-06-03
BUSINESS GOOD BUT
 CAUTION PREVAILS
Henry CleWs Believes This Is a
 Desirable Feature
Especial to the Herald.)


 l than stock market movements in
 dicate There is some disposition to
 hesitate. owing to high prices, war
 and political uncertainties, also to a
 closer scrutiny of credit, but this tendency has not thus far become suf- | fciently pronounced to induce more
 than partial slowing down of activ- ity, which, taking all things into con- sideration, was somewhat desirable. The war created abnormal conditions
 in certain directions. and there was ! serious danger of reckless expansion | and speculation unless some form of l restraint was imposed. This developed 1 a more cautionary spirit among those 1 who assume the initiatives; bankers i have become more discriminating and l merchants are careful not to over ! stock, while manufacturers are pro- l tecting themselves against contingent ] cies with more than ordinary conser-
 vatlsm. In consequence there is
 widespread optimism throughout the
 country mixed with a strong vein of
 caution. This healthy balance be- 1 tween these two forces is one of the 1 best assurances of continued activity. l The prosperity of the United States l has undoubtedly been greatly stimu- l lated by the war. especially in the l East; but this is only a transitory 1 stimulus which will eventually bring
 it's own reaction: while far ahead of l it in permanent importance is the
 better sort of prosperity based upon
 several years of big crops, especially l the harvest of 1915. The American ] farmer was never so well-to-do as to- 1 day, and west of the Alleghanies this l is still the vital factor in business,
 notwithstanding the rapid develop 1 ment of industry and trade in keep
 ing with growth of population.
 1 Proof of these statements is found | in current trade statistics. Bank
 clearings last week at leading cities l were 56 per cent ahead of last year;
 a very large gain, even allowing for
 the effect of high values. Railroad ] earnings for April thus far reported l show an increase of over 22 per cent. 1 New capital issues in May in the prin- cipal states are estimated at about l S192, 900, ,000, which was nearly double 1 a year ago and the largest May on 1 record except 1910. A feature worth 1 noting is the flood of municipal bond issues, the total for the year 1915 1 being about $500, ,OO0, or the larg- est total on record. Still another fea- 1 ture is the numerous new petroleum ! issues, the total reported in May alone being S67,OOO,OOO. The record of new
 enterprises for May shows particular l activity, the total charters of con-
 cerns above one million capital being ] S2O9, 100000 or ITO per cent. above | the same month last year. Dividend 1 and interest payments in June are es- l timated at S137 7OO0,000 or 17,000,- i 900 more than last year. This in crease was largely due to the divi-
 dend of s6,30O,0O0 on U. $. Steel,
 which paid nothing a year ago. Not
 a few industrials could have paid | larger dividends, but prudence dictat- ed a conservation of financial re- sources, such as reduction of debt, 1 improvement of plant and building up
 of reserves. During the past year ZIG 1 companies reported profits of SlSV,-
 oOO,OOO, or O,OO0,OOO more than
 year ago; the steel companies show ing an increase of sS7,o00,0 900, the
 ammunition companies s66,000,O00,
 the copper concerns s43, 100000 and l petroleum companies $3S,00,000. A 1 year ago these companies earned 1 about per cent. on their capltan- l ZatiOn, while in the year just ended ! they earned over 3 per cent. Building
 operations would probably be upon a l larger scale were it not for the hlgh
 cost of materials and labor, Whlc1l delayed many new enterprises. The
 railroads are also deferring thelr puf-
 chases for improvements and rolilng stock as much as possible TOT S11i'llar | reasons. The steel industry contH- 1 ues in satisfactory condition ana Will | be fully employed for months to come 1 at profitable prices The one 1mpof-
 tant factor that is not encouraging is 10
 backward and without any bumper
 crops yet in sight On the other hand l prices are relatively high and with the surplus left over from last year, moderate crops will insure good prices for the farmer.
 The stock market is laboring under
 several adverse conditions, and un- l able therefore to reflect the favorable | business conditions referred to above.
 Chief of these obstacles are the presi- Oential campaign, the war, our rela-
 tons with Mexico, the influx of se- ] curities from abroad and a somewhat | closer money market. The political
 campaign is really less exciting than
 usual and seems to be one of men
 rather than of issues. The latter i promise to be mainly patriotism and l preparedness, with prospect of the
 tariff coming into prominence later
 on. The war goes grimly on. There l is a flood of peace talk but no trust
 worthy signs of action in that drec- | ton thus far. The desire for peace
 grows in intensity but so does the
 Bitterness of the struggle which is 1 not likely to end until defeat, actual 1 CT potential, ebrings submission. 1 Mediation just now would be useless
 and possibly harmful The Mexican
 situation is again threatening and 1 delicate in the extreme. This gov
 ernment is certainly patient and long | suffering under an intolerable situa- | The of fOroj9n