New-York tribune., 1920-12-06

! tcrday, brings out in bold relief the
elements Of uncertainty in the present
railroad situation. In tho first reports
of earnings under the increased rates
the carriers did not attain sufficiently
large net incomes to reach the per
cent basis which Congress intended in
the transportation act. However, the
first months are admittedly inconclu-
sivc. And yet Professor Dixon argues
reduced, the railroads might have to
appear again as suppliants before the
Interstate Commerce Commission in
quest of further rate increases. The
future Of railroad earnings depends
more, though, on the state Of industry
(and tho volume of traffic created) than
on tho rates charged. One Of the OBJ
staclcs to solving the problem by ad-
ditional increases is that they might
tend to reduce instead Of raise gross
earnings by dscouraging travel and
also the shipment of goods. The
important point made by Professor
Dixon is that the Esch- Cummins act
did not by stroke of the pen solve the
railroad problem, which is still with
us. Railroad men contend that the
November earnings will afford a bet
ter basis for assessing what the roads
are doing than either the September
or October reports.
December is likely to be one Of the
most interesting months Of the year in
the money market. For one thing, the
return flow of funds from the interior
of the country will be accelerated, if
tendencies accord with the precedent
of other years. With the peak Of the
agricultural demands of the 1920 fall
season behind us, the problem of TAX
ing care Of pressing governmental de-
mands will command the attention of
the banking community henceforth un-
til the end of the year. No doubt is ex-
pressed as to the ability of the banks
to meet The situation without undue
disturbance to rates at this center, yet
the large transactions arising from tax
payments, government borrowings and
interest disbursements on government
war loan bonds may be expected to
make for temporary frmness.
On December Is the final installment
will be due on account Of Federal in
come and excess profits taxes. This
payment has been in large measure an
ticipated through the sale of Treasury
certificates of Indebtedness, which will
be turned in to meet the taxes in lieu
of cash. In the New York district
alone the total of such certificates out
standing amounts to s324.000,0 900. On
the same date the government will be
called upon to pay out approximately
S140, 100000 to meet the semi-annual
interest due on the first Liberty loan
bonds and Victory note issues. To meet
the needs Of tho Treasury it is ex-
pected that a new issue Of certificates
OF indebtedness will be placed with the
banks before the middle Of the month.
All of these operations, though in many
cases being offsets, nevertheless will
cause shifting Of banking funds that
cannot help but be reflected In the
money market. Then there is also to
be taken into account the end Of the
year settlements for the account Of in
dividuals and corporations. With the
turn of the year money will be much
easier, in the opinion Of many bankers.
the credit market per cent rate will
be reckoned comparatively low.
The foreign exchanges have displayed
q marked degree of steadiness during
the last week, which is in sharp con-
trast to the great unsettlement Of a
fortnight ago. The supply Of bills
drawn against the fall movement Of
goods to Europe seems to have con-
ttacted. The greater stability IN stcr-
Ing appears to be coincident with the
heavy arrivals of gold from London,
both on British government and pri-
vate account. The pound sterling is
still at heavy discount here as we'll
as in many other leading world mar
kots. A compilation made by The
.ondon Statist shows that sterling
early in November was at a discount Of
81 per cent in Amste rdam, 13 per cent
ir Switzerland, Id per cent in Buenos
Ayres, 81 per cent in Montevideo. 80
per cent in New York, 2.5 per cent in
Stockholm and 80 per cent in Yoko-
l.
stood at a premium of 1902 per cent in
Berlin, 104 Der cent in Brussels, 40 per
cent in Christana, 80 per cent in
Copenhagen, 115 per cent in Paris, 269
per cent in Rio de Janeiro and 271 per
cent in Rome.