The labor world., 1922-12-30

nay be had by:anyone who will
, Publishes Review. -.
The Cleveland. Trust company also
publishes such a review and the re-
view published by: that company is
probably one Of the best in the field.
= What a: great many persons un-
doubtedly do not realize is that these
reviews in time of need serve as pro-:
paganda agencies for high finance
and that their dignity~an seeming
authority makes them the more eff
fective when real need arises. The
discriminating reader will. find much
of interest and value in the pages
Of these periodicals., but thosa, w'ro-
do not discriminate are, .like1y to ..be
brought to false conclusions on most
important matters.
The publication issued by the Ma
ttonal City bank is issued monthly
and averages about sixteen. pages.
The National City bank represents
speculative finance just as Moreaps &
company represents Industrial g.
nance The National City bank, bet
ter than any other Institution, typi-
fies Wall Street. -. s;-s:asS: $
Nothing has 50 disturbed the Ma
tlonals City bank. as the recent elec-.
tion in which progressives hostile TO
railroad profiteering and to plunder-
Ing in general were so uniformly sue
cessful Il we are to-believe the De-
cember issue OF the publication is-
sued by that bank. s:s' =. -. 4. 4
~ e<s#a Finance. Is Worried.
It will be interesting to know Why
high finance looks upon the pro-
4ressfve victory as. such a menace.
Theexplanation is In the following
quotation: from +. the National City
bank publication:s ~: !. ,:z.s.a3* s.ia957
! :Notwit ithstamding the evidence that
the depression OF saEricpItural py1ces
has BEEN difactly ralated to Tia
Ss.est lon stpnifcies ars pre-
posed in this name of relief for ax4.
ffnu1ture. which H carriSd. out mn
tend to check the Improvement ik
AGRICULTURAL condi ditions which il Ma
aeF. VS. a.y,.and throw the country back
into5za-sstate OF disorganizatfon. M.
certatnaX and confusion. -.
+ The stock market, which Is quIct
TO sense developments unfayorablets n
orderly Business progress, has shown
decided weakness since the election,
railroad shares leading in the de-
cline. Although the country evident-
ly is suffering from the .inadequacy
Of railroad facilities. due to the fact
that railroad Investments no longer
command the confidence ce of the pub
lic,. one Of the objects of the revived:
agitation Is the repeal Of the trans
portation act defining what in the
opinion of the legislative authorits.
is fair return upon railroad prom
erty. ss 500, s.. ~. ss-5s
Nothing more would be require
to make the railroad situation shor.-.!
less. Railroad service cannot be had
without the facilities, and these can-
not be had unless the investing pub
tic is: assured OF q return correspond
ing to what can. be had IN other fields
of investment. Or!9 view commonly
held at the sources Of this agitation
seems tc ':e that the railroads are
owned by q few. rich bankers who
are able to put their hands In their
pockets for all the money needed to
provide the necessary expansion OF
service. !. ~ ! rs " ".
THE railroads. however,, easnot
owned by bankers: the ownership is
Wild ely distributed and will respond
with additional capital only 1T be-.
lieves the Investment to be safe. The
strongest companies are able to bor-
row, by giving mortgages or stock.
but this, Is just like putting a second
mortgage ,.on a farm. This process
cannot be carried Ind finitely, be-
cause the margin of safety grows.
smaller.
Proper financing Of the railroads
requires that approximately one-half
Of the -cap pitaI-s be Represented
by capital stock; in other words,
that proportion should be proprie-t
tary capital. in order to obtain fa-.
vorable terms upon borrowed money.
Very little new capital has been
raised for railroads by that means
recently. Expenditures for rolling,
stock are financed mainly by means
|of equipment trusts, the new equip
ment being mortgaged for about 7bf
per cent OF itss cost. = s...s .s2z5sss $5.
It. win be noted that the stock
market is set up as an indicator.
which quickly detects unsound ds-
|partures.. What is real the case =,
that the stock market quickly de-I
tectss ssdevelopments# # unfavorable to.
speculative interests. The stock mar
ket ssis. no indicator at. alias TO the
real soundness OF economic pros
posals. ssss. .s.- .ssiss
,FOrgcts Good Management.
The Netional City bank assumes
that we have an :'inadequacy OF,
railroad .facilities' because '..raisrdaAi
|investnaents no ldnSter command the
confidepce of tbs public.. Upon this
the bank hases plea tor retaining
the Esch- -Cumln.11 sslaw. It D all vefy
clever, but II 4 also III vsry mis-.
Issdinl
Continusd On paxe
s5s