The Washington herald., 1917-05-30
HOLLAND LETTER
The Biggest Daily
Financial News Feature
Of the Copntry's Best Newspapers.

I De1NSOh' VI >. +. morgan q Co., Nen-
/ tured to make some tentative predictions
about the outlook for restored business
activities. Mr.. Dawson had Just return
ed from a second visit to London since
the war with Germany began. Both of
these sojourns in London. and for a
time in Paris. gave him opportunity for
| conferences, the results Of which were
| afterward reflected In some of the great
! financing whereby the United States gave
vital aid to England and France.
At the time Mr.. Dawson spoke. in the
| spring OF 1915, there were. as he thought.
! the first faint indications of the coming
! of the dawn of better days for the
| United States. He referred to the situa-
/ tion in which the United states Steel Cor
poration found Itself in the fall Of 1914,
| and at the beginning OF 1915. The fig-
ures, which told Of the operations OF this
/ corporation in that time Of anxiety. were
/ alarming unless they could he regarded
| as fixing the minimum of business de-
! preston. For the story Of the Steel
/ Corporations operations was regarded in
! the business and financial world as es-
! tahlishing standard whereby general
business conditions could he measured.
Improvement Looked Temporary.
| Early in 1915 there were some evidences.
/ to which Mr. Dawson called attention.
that the low water-mark had been reach
| ed by this corporation in the Tall OF 1914
Nevertheless, early in the spring Of 1915,
! II could not be said with certainty that
these evidences reflected any more than
inonehtary Improvement. not to be re-
! lied upon as indicating general increase
! H. however, there were in the remain
| ing months of the year Of 1915 reports
! from the United States Steel CORPORA
| tion, which showed a gradual increase
| in activity, then, in Mr. Davfson's view,
| that could he accepted as satisfactory
/ proof that both this corporation and all
industries in the United States were or
, the hlghroad possibly to great prosperity.
At that time there was no apprehension
. lest the United States actually be drawn
| into war with Germany. but it was AL
/ parent that our allies would moro and
more relp upon the United States for
substantial assistance both through
furnishing credits and through orrerinF
| satisfactory markets where they could
| purchase the supplies that were needed.
Estimate Is Justified.
| Mr.. Dawson at that time. with his
customary caution. intimated that It was
possible, but perhaps not probable. that
within the course nf year or two the
| industrial, commercial and financial
prosperity NJ tho United States would he
so great as 10 make world record
/ Now what he then inttmatcd is fully
/ justified by the event Whatever the future
course in the securities market may bN
50 far as quotations for the common
stock Of the United States Steel Corpora
tion indicate It, there is another point Of
view which is Of more Importance TO the
American people. That they have recog-
[ niZed II IS regarded as certainly proved
/ by the new record made by the common
| stock Of this corporation in the market
| Whether that record Is 10 he improved or
not Is from one point OF view of slight
consequence. But the record does show
| an unparalleled increase in industrial
prosperity within two years, unparalleled
both absolutely and relatively.
! When Mr. Dawson spoke in 1915 the
gross operating revenues OF the corpora
ton were only C. little in excess Of $50
O0oo o0o for a year Now the gross revenues
| for a single month are So great that II
| they be continued throughout the year
they may exceed. certainly will equal, the
total capital stock Of this corporation as
well al its funded debts and those Of its
subsidiaries. or, in other words. the gross
revenues may and are likely to be con-
siderably in excess Of $3.50, ooo,oOo.
A Symptom of Prosperity.
Then again. when Mr.. Dawson made use
Of the United States steel Corporation
situation for an Illustration, its net oper-
ating income was nearly S64 O0O.OOO but
within two years with such amazing
rapidity had prosperity been established.
the net revenues were nearly 1910, 900. 900,
Of which S271. coo was available for divi-
dends In 1914 the corporation paid AO50O.-
OOO in round numbers in dividends, there
by creating a deficit It did not however.
reduce the wages paid to its employees.
Two years later the corporation was able
to pay its stockholders approximately
so. 100000 in dividends and stiu have
surplus in excess Of $3OO.001OOo.
These comparative figures have been
for several days alluded to as furnishing
a concrete example Of the stupcndous
prosperity which is now established every
where in the United States. For it is rec
ognized that the steel corporation does
not in these figures represent business
growth exclusive to itself. but does re-
feet general conditions not only in the
steel and iron industry, but in all lines
upon which business is established
throughout the United States.
In 1914 neither the steel corporation nor
any other corporation would have been
able to subscribe S25OON,00O. or any part
Of $25, 900 600. to a loan offered by the
Federal government, even though the in
torest nominated in that loan was fixed
at the rate Of 31-2 per cent. Now this
corporation, and many others. probably
all of those engaged in the iron and steel
industries, are subscribers to the liberty
loan, not persuaded to subscribe solely
by patriotic impulses, but also because
the investment is regarded as not merely
excellent, but, from the point OF view
Of security, perfect.
Mr.. Schwab's Prediction.
Shortly before Charles NJ. Schwab ap-
peared as a witness in the proceedings
brought by the government for the dis
solution Of the United States Steel Cor
poration, he was quoted as having said
that the corporation IN normal times
ought to earn net not less than SoVO,WO
a year. Mr.. Schwab's testimony was
regarded as of the highest value. because
he, as preside of one Of the greater
industries occupied IN the manufacture
OF iron and steel products, was presumed
to be brought in one way or another IN
competition with the United States Steel
Corporation. But his intimation was
that there was business enough In the
United States in normal times for all
the steel and iron industries, and that
while a certain amount Of reasonable
competition might he inevitable, never
theless thai would serve to stimulate in
stead of no restrain trade. Mr.. Schwab's
view was understood to be that OF all of