Evening star., 1923-02-04
BUSINESS OUTLOOK
/. CONTINUES BRIGHT
Experts Predict Favorable
Domestic Conditions for
Spring and Summer.
PENNSYS 1922 REPORT
Bond Brokers Regret Decline in
Libertys-War Savings Hold
ers Taking Cash.
PENNsY's 1922 REPORT

Notwithstanding the unfavorable
outlook abroad, the best observers OF
domestic business continue to fore
cast prosperous times for the coming
spring and summer. A number oi
factors looking in that direction have
already been definitely noted. Among
them is the fact that Congress viii
shortly adjourn, and as there is little
prospect of an extra session being
summoned this should give the ma
tion a. vacation of some eight months
when it will be free to carry on WITH
out anticipating the danger oil fur-
ther meddling by that body with
trade and economic conditions.
Penn.yIvania's 1922 Net Large.
Although still far from the point
at which it would show excess over
per cent on its property account. as
given in its books. the 1922 net earn
ings of the Pennsylvania Raiiroao
Company are almost double those ol
1921. according to the annual state
ment of the company.
Its December earnings, with a gain
of nearly s10.000.0OO in gross and oi
$5,571.932 in net operating income
are S6nGTd1Iy III llDc win bhoSS
other trunk lines and continue proof
OF Pennsylvania's recovered earning
power, in evidence throughout the
year just closed.
1t should be noted. however. thai
net compares with only s457,074 fol
December, 1921. out of $47.s57,00
gross. the net having been unduls
depressed by debit lapovers from
federal and guaranty periods.
Pennsylvania's income account this
year includes the Panhandle and the
Grand Rapids and Indiana. with sew
When fixed charges of these lines
have been taken in any necessary adj
justmentS made the result Will be
something better than 8 per cent. but
probably less than per cent on the
S500.000. 600 stock.
Rond's Net Operating Income.
The roads net operating income fol
1922 of s73,5o5.l49 represents pract1-
cally 100 per cent increase over the
S37,157,334 of 1921 Similarly the ''sys
tens" net operating income was
s79,S54.40S. against s40.715.126 for tn.
year preceding. But earnings are still
far from the point at which the com
pany would have to divide an "eX'
cess" with the government II the
Commerce Commi ssion's valuation o.
. the property is anything like its valu
alton on the company's books.
AS of December 81. 1921, the lattc1
is given as s2,102.421.s11, on which
the company might earn per cent
or s126.145.S00, before beginning Il
divide. In 1916. its most prosperous o.
recent years the system earned s102.
201,900. or 5.6S per cent on bool
valuation of s1.799. .055.000. In tina
year the Earent COMPANY made a 10.4
Per cent, or 1928 share. on the sam,
amount Of stock as is now outstand
~.
invested in the plant and $253,000.0 900
the stock earnings were only littlt
more than $3 a share. Still. in 1872
they were only s2.45 a share.
Steady Market for Libertys.
The decline in liberty bonds ha
caused some disappointment in bont
houses. Two months ago there was
general feeling that the governmen
long-term bond issue before Marcl
Is. All such hopes have vanishe ed
Few. if any. dealers now expect a.
offering bearing less than Az per cen
in the near future.
Attention is called to the fact that
with the exception of the first 31a
all government securities. includinI
! the recent Treasury Al are selling
at discount.
Several dealers believe il would b
difficult to sell even a AZ issue in TIL
| present market without pressing bank
/ 20 take them. Open market quotation
for various government obligations GER
tainly do not seem to favor loan bear
! ing low coupon rate.
/ Bankers say the Treasury cannot ma
| terially help the market because of tn
, s2S3, ,S3s,S00 appropriated for sinking
fund purposes covering the fiscal yea
ending June 80. 1923. all but about $45.
hay L.,
! words. the Treasury has been buying a
an average rate of about $50, 900. 600
month since July l, while for the mex
/ five months it can buy only about 49,
900. 900 a month.
That some kind of borrowing in tn
near future will be necessary is ap
parent from the fact that the Treas
ury's cash balance January 81 was onl,
$3.50. COS. 900. q shrinkage Of about $50
100000 since January 20.
Holders Desire Cash.
Against the present cash balanc
there are still outstanding about $3.50.
900, 900 war savings securities due, bu
not yet presented for payment. To dat
about 80 per cent of holders of thes
securities who have presented them fo
redemption have demanded cash. Be
sides war savings securities due ant
unpaid, there is a large volume of vic
tory notes that may be. and probabl,
Will pc' PIcocHlSu pdyIlSUl III III
near future.
Such payments would not neces
sarily. force borrowing in the opel
market. Temporary loans from fed
eral reserve banks could be arranged
but that would only defer the publ
offering.
Speaking of the present condition
of the market with reference to lib
erty bonds, the Wall Street Journa
says:
Bond dealers offer various reason
| for lack of strength in the libert
market. one dealer expressed opin
| ion that commercial banks have littl
| idle money ct present, and they ar
| not inclined to borrow from fedora
[ reserve banks at 4 per cent unles
they can get more than per cen
| from customers. With money rate
/ around 8 per cent, according to thi
| dealer, there Is no reason to expec
| any sustained forward movement /
| liberty bonds. No dealer expects ma
/ terially lower quotations, howeve,
Opinion seems to be general tina
! Unof Of for fha navf fa,x- I,