Evening star., 1931-12-04
Everybody's S
Business
American Railroad Interests
Are Closely Watching
Outcome of Wage Situa-
ton IN Canada.
BY DIR. MAX WINKLER.
Special Dispatch to The Star.

Special Dispatch 10 Ihe star.
NEW YORK, December 4s-Settle-
ment of railway wage disputes in Can
ada Is much less complex than in the
United States, where decisions must
be passed on by the Interstate Com
merce Commission, a method involv-
ing considerable delay and inconven-
fence.
The Canadian roads have just or
dered a 10 per cent cut in wages, to
be effective as from November IL. The
Brotherhood of Railway Trainmen, as
might have been expected, has lodged
a protest with the Labor Department
at Ottawa.
The move by the Canadian carriers
will be watched with interest by the
American roads, which are at present
discussing the question of wage reduc-
tions as one of the steps necessary to
assist them in their present precarious
condition.
Short Term Credits.
While short-term credits have stimu-
lated business, they have not been a
reliable foundation for sound economic
development, according to Hermann
and director of the chemical combine
in that country.
Speaking Of the forthcoming confer
ence on the German debt question, DR..
Schmitz is convinced that solution
acceptable to all concerned can be found
If the problem Is approached calmly
and effectively. The doctor thinks the
basis for a thorough and lasting recov-
cry Of world economics lies in the
wide distribution of gold and credits.
These must not, however, be used for
purposes which would affect interna-
tional trade adversely, DR.. SchmitZ con-
cludes.
Pressure on Motors.
The pressure on General Motors is
said to have been prompted by the ad-
verse conditions abroad, where the COM
pany has large investments. This Is
especially true of Great Britain, where
General Motors controls VauXhall, and
Germany, where it owns the Opel
Works. There is no doubt that earn
ings of these subsidiaries will show
shrinkage.
On the other hand, one must not
overlook the advantages which are
bound to accrue in the future to Gen
eral Motors as result Of these for
pecially, the combination of a tariff
and the depreciation of the pound may
benefit the company. The German es-
tablishment also should do better, as
soon as arrangements are made in re-
gard to the country's present debt
status.
Railroad Maintains Program.
The Pennsylvania Railroad has not
cut its program for larger unsefulness,
despite the general business depression,
according to j. L. EySmanS, vice presi-
dent, in charge Of traffic.
The road, Mr.. Eysmans says, is bet
ter equipped than ever before to move
both freight and passengers swiftly
and safely, with close adherence to
schedules. He also points out that
the plans for electritication between
New York and Washington, expansion
of collateral transportation facilities,
vast improvements and requirements O.
roadbedS, rails and rolling stock are all
going steadily forward.
Bond Defaults.
With defaults on various types of
bonds occurring rather frequently and
with many bond issues selling at prices
indicative of imminent default, 1t Is
refreshing to study the record Of one
of New York's guaranteed mortgage
companies. Less than per cent of
all mortgages bought and guaranteed
by it detaulted during 1881, while the
sale of properties foreclosed has been
accomplished in most cases either
without loss or at small profit.
In consequence, after all statutory
deduction, the company was able to
earn its 20 per cent dividend on the
common stock with a substantial
margin.
Bonds Sacrificed.
That the Selling of railway bonds
borders on the ridiculous is obvious.
While the railroad situation is not ex-
actly what may be desired, it is equally
true that not all systems are insolvent.
The Missouri Pacific" is case in point.
Its II per cent bonds are selling to
yield currently well over Is per cent,
even though net for the first 10 months
OF this year covered taxes and all
hXed charges with a margin substan-
TALLY In excess of S2,500,000.
Dividend Omission.
Charles Hayden, chairman of the
board of Rock Island, expresses regret
that the dividend on the company's
preferred stocks had to be deferred.
stockholders will be somewhat disap-
pointed, especially since it is the first
omission IN about a decade and half.
The passing Of the dividend, Mr.. Hay
oen says, was prompted by desire to
conserve the company's cash position
as lar as possible until improved con-
dltlonS manifest themselves in the rail-
road world Hopes are, however, held
out 1or resumption OF disbursements as
soon as conditions warrant, the pre-
1erred dividends being cumulative.
Earnings Becoming Stabilized.
;, Results OF the past four months in
dlcate that the earnings of American
water Works & Electric Co. are be-
coming stabilized, according to II
Hobart Porter, president.
Mr.. Porter attributes this condition
to economies in operations, the large
increase in domestic use of electricity
for various labor-saving household ap-
pliances, and the stable character of
the earnings Of the water works prop
critics. r0H
For the IL months ending October
3I' pronts per share amounted to $3.50,
ana pfactlcally were unchanged from
Lne ~ months period ending Septem-
$3.50. ''A00
Argentine Bonds.
While Argentine issues continue
strong, the repayment of the countrv's
short term obligations, part of which
are held by American interests, is not
very likely, and a renewal probably
Will have to be granted. The bankers
OF course will prefer to put through
retunding operation, that is. the con-
version OF short term debts into a long
term issue which will be salable to in
VestorS. To market successfully any
Such issue, better prices than those
optalnlhg today will have to prevail.
one very satisfactory phase of the
situation, however, is the decline of the
governmental deficit to only $40 00r non
Tor the first IL months of this wear as
compared with deficit of more than
four times that ~