January 10, 1885





The   Record   and   Guide.





2B





that the Grangers and especially the corn roads wUl show a larger
receipt than during December of last year, and that January
returns would indicate a still better business. The farmers must
sell their corn and hogs; they cannot help themselves, aud I judge
that their heavy offerings of corn in January and February will
prevent any marked advance. Some time this year I expect to
see wheat sell in Chicago for |1.20 a bushel ; but that figure may
not be reached before next fall. Corn iuny see liO cents a bushel
during 1885, but will not do as well this spring, owiug to the large
auiouuts in the hands of farmers who must realize.

Observer—How ateut the rumor affecting prominent capitalists,
w ill not that prevent a January " boom ?"

Sir O,—If several prominent persona failed of c<iurso it would
affect prices, but ,the higher values for stocks, which I am predict¬
ing, would come later, I think it very likely that cai)italists with
extended jilans, requiring large means, may ha^e been cripjiled in
their operations ; but faUuies now would not te as hurtful to prices
as they were, say last May, or if they had been dHveloi)ed after an
apparently prosperous season. It is the unexiiected, such as the
Garrison collapse, and the Grant & Ward fiasio, whicli startles the
street. Nothing short of the failure of a .lay Gould or a Vanderbilt
would have any lasting effect.

Obser'VER—You think then that the outlook is better, and that
there will be some recovery of value.s'/

Sir O.—There has been a recovery of values in cotton, wheat,
corn, and there will be higher jirices for stocks. I think I discern
a better feeling in the general trade of the country.

Observer.—-Yes, I see that a number of mills and many iron
factories have resumed work. Will not this nive us a better bu.si-
ne.ss for the rest of the year ?

Sir O.—Let us not deceive ourselves. We laid only l,UUO miles
of railway track last year. I think that tliis yeat' we «'ill lay trom
.1,000 to 6,000 miles of track. I think that more iron and all the
other metals will be consumed in IHS.I than there were iu 1884, but I
see no advance in the price ot iron, and till that occurs I cluubt if
there wiU te any permanently better times. We must learn to dis¬
criminate between different classes of business. .Stocks ought to
advance and will ad\ance, because of the improvement in the
business of the Western roads, due to the large corn crop, but 1
expec't to see a break further ou. We have more railway mileage
than the business of the country can make profitable. H will take
several years for us to " catch ou." Just look at tlie figures pub¬
lished in The Record and Guide of last week, showing the
numter of inhabitants, of acres in grain aud cotton, of bushels of
grain and bales of cotton ]irodiiced jier mile of railroad for the last
six years.

Poimiation.          Acres.              Bu. ^raiu. Bales oullou.

1879........                .......     581                    l.Slifi                    31.6IW                    67.73

1880..........................     iH.")                      1,466                      28.932                      7(1.53

1881..........................     509                      1.3.59                      19,81H                      ,'>2.65

1882.........................     473                      1,336                      23,41)5                      IJO.IK

1893..........................     46i;                      1,204                      21,5(8                      47.00

1S81.........................     4.50                      1.202                      23.,590                      43.(M

These figures constitute a bear argument which there is no getting
over. Then look at the shrinkage in securities. Stocks of railways
shrank in value to the amount of $025,500,360 during the year 1884
alone. No douljt the shrinkage since 1880 has teen fully $13,000,000,-
000. This shrinkage in value of securities not only means a cut¬
ting off of dividends, but also a decline of borrowing capacity and
the loss of business capital. But this talUng off in values is not in
stocks and bonds alone, but iu everj'thing, as is shown by a para¬
graph in a recent editorial of the Tribune.    [Reads.]

With a fall in the aggi'egate of 20 per cent, since 1S60, the ilecUue in the
cost of breadstutl's « as almost SO \>ec cent.; in sugar, tea aud uott'ee, 25 per
cent.; in clothing, 25 jjer cent.; in metals, 41 [ler cent.; in coal and oil, 45
per cent.; in luniter, only ft per cent.; and iu nitscellaneoiis ai-ticles, iuclud-
ing building materials, gla.ss, paints, dnig"s, jiaix-r, soap aiifl uliemiuals, 28
per cent. On the other hand, stiJl coniiiaring the lowest prices ot IJeceiiiter,
1884, with those of Augii.st, ISt'iO, there apjieai-s au iiu'iease in li(iuor and
tobacco at wholesale of more than ,511 per cent., ou account ot tho taxes; au
increase of 1 ix-r cent, iu meatti; ami ot 7 jjer cent, iu dairy aii<l gai'ileii prod¬
ucts. Manufactured articles generally, it will be observed, have ilocliiieil
in price more than the average ot all product.s.

Observer—I see that the Daily Stockholder makes a distinction
between the purchasing power of mone}' for agricultural products
and manufactured articles and stocks and bonds.

Sir O.—I can see no difference. Money purchases more of every¬
thing. It is the one thing which has increased in value, due to the
demonetization of silver and the lowering stocks of gold, the meas¬
urer of values all over the commercial world, yet I have always
argued that dividend-paying stocks ought to advance in price with
the rising value of gold, and some day I think they wiU, Debts
payable in the legal tender of the world, salaries, incomes that are
certain ought all become more \'aluable, as the cost, of everytliin,g
used depreciates. This is one reason wdiy I look for an enhance¬
ment in the value of bonds and fii'st-class stocks, while .Isee no
great chance for a general improvement in other values. They will
apparently shrink as gold which measures their value appreciates in
purchasing power.





Observer—Real estate then will have to come down in the mar¬
ket price.

Sir O,—Most assuredly. Last spriug we saw the curious phe¬
nomenon of an advancing real estate market, with a declining stock
market. I expect to .see a rever.se of this a|ipareut anomaly this
spring—that is an advancing stock market aud a declining real
estate market. The decline of realty values will, I tear, operate for
several years, while the advance in stock values will te but tempo-
lai'N; that is so far as the general market is concerned.





The Iron and Coal Prospect.

Civil eugmeer L. F. Holbrook, well kuowu in scientific circles, and who
ha.s studied the sub.ject, was asked his opinion of the iron outlook.

"The depres.sion," he responded, "is uot yet over, though I Icxik for a
lurgei-railway i-onstructioii iu 1S85 than occurred in 1884. The Southern
iron iirmluctiim is jiroviiig a very serioius matt«'r for Pemisylvaiiia itianu.
farturers. 1 have persiniully investigated the iron and coal districts in
uortlieni Alabaiim ami know whereof I .speak. The couuiiou and medium
grade.s of pig ir.ni can he produced in northiM'u Alabama very much
cliea[)er than in Peuii.syUauia, l)ecaiLs*^ of the pro.ximity of the coal andii'on
lields Ut each other. (It^ologically coal and iron belong- to entii'ely different
foriuutioiis. They are iirobably ages ai>art. Eiiglaud'.s and .Scotland's supe¬
riority to nfher parts (jf the glote is because irou aud bitumiuoiis coal are
foimd close together, and both are contiguous to tide water, hence the pre-
eiiiiiience of the I'iver Clyde for inamifa;-turiiig iron and steel ships. Penn¬
sylvania t-oal UMil iron are not fai- ai)ai't, but they are distant from shipping
lM>rts. The coul and iron of the Semtheru States are still more uiland, but
they have extraordumry advantages in many ways, such as the ueamess
of the mines to each <>ther ami the ea.se with whicli the iron ore is mine<l.
It is a Viiriely of ore, indeed, which needs very little labor aud then the
jn'ice of labor is. and is likely lo remain, very cheap. Tlu^ ortUuary jn'oce.ss
of milling ill the iiiamifiictiire of pig irtni i'e<piii'e,s very little skilled labor.
The .Stiiitheni iron founders cauuot compete as yet with PeuiLsylvaiiia in
the liner giailes of iron and steel, but after all it is the low aud me<litin>
gi'adcs which conipi-ise the bulk of the bu.sines.s. Ciucuuiati is the natural
liejidt piarters of the Southern u-ou buHiues.s. and the mines in Alabama,
tieorgia, Teunes-ee, as HeUa-s tho,se iu Missoiui, ^vUl very Ukely take the
whole trade ot the Ohio and MissLs-slppi Valleys, to the exclu¬
sion of the Peuiisylvauia ii-oii. ■ Colorado has very tine iron luiues
aud plenty of both bituniiuous aud anthrac'ite coal. Its coking ctial
is as tine as auy in the world, ljiif<»rtimately, however, its coal and iron
lields are not near each other as iu the Southern Stales, and then labor in
Colorado is and is likely to remain high. It \vill, however, have control of
the local traile, that is the steel nails and iron for rails, on account of the
freight charges t*^ and from the East. The Colorado Coal and Iron Com-
l>aiiy will have a monopoly for some years, but when the iron industry
revives T exjject to .see works put up by jioople interested in the Union
Pacific road. They have formed au organization aud have seemed coal and
iron lands adjacent to each other in the Crea,st of Butte region, which has
an advantage over the Colorado coal and ii'on industries in teing near each
other. The Colorado Comiiauy has had the u.se of the Denver & Rio
Grande system of railways, but the Union Pacific competes Avith this sys¬
tem at evei'y jioint. Notlilng will be done by the Union Pacific ^leople for
several years yet. The u*ou outlook is not rea.ssuriiig so far as the imme¬
diate fiitiu'e is coneerneil."





About Western   Union.

A gentlemuii who is thonmghly convei'sant with the ait'airs of Westeiii
Union was asked recently a.s to the '' true inwardness " of that company. He
declared that the " cut" of the Baltimore & Ohio is more apparent than real.
That comjiany is adding very little to its mileage and its cutting of rate^
atfects but few offices comparatively. It has only .5(l,0f)0 miles of mre against
the 4.5(1,0(10 miles worked Viy the Western Union. The Baltimore & Ohio has
no exclusive busine.ss while nine-tenths of the business of the Westei*n
Union Ls froniix)iuts which the rivalcoiuiiany caunotreach as yet. Western
Union was really eaniuig ti per cent, on it^ capitjil stock.

" But," a.sketl the writer, " how is it that the majority of the directors,
including Cyrus W. Field, sold their stock when it was iu the sixties C

" I do not know that to be the case," was the response. '' Were
I the absolute <iwiier of Western Union I would suspend the pay¬
ment of dividends iov two or three quarters and then develop antl cheapen
the telegi-ajihic service so thoroughly that no rival company could compete
with it The stock might go down to 4(1 while the dividends were stopped
but when they were re.siuned the stock ought to sell for par.*'

" Is that the programme which cause<l the directoi'S to sell out V

" Don't quote me as saying it is, I'm telling you what I would do. The
Baltimore & Ohio is, I think, loosing .^S,0(X) a day."

In this connection it will be noticed that the Daily Stockholder, which is
now Gould's organ so far as Western Union is concerned, is promising that
the price will he advanced and upheld. The probabilities, however, are that
Jay Gould is again deceiving the " street"—that he is only creating a mar¬
ket on which to seU with a view to suspending ilividends and then repur¬
chase at the low prices.





The uew Standard Theatre has a very beautiful interior. It is admira¬
bly planned for seeing and hearing and there is no danger of loss of Ufe in
case ot fire. The "Trip to Africa" is, however, a disappointment. True,
the scenery is tasteful,' the costumes striking and picturesque, the music
tuneful and tbe libretto well constructed, but the company, male and female,
'are unatti-actlve. The leading soprano sings fairly well, but she has no charm
in 'her manner. The leading male actors belong to the large class of un-
amusing comedians. One of them is a German who is a very great favorite
iu his own language, but German  corae<Uajas who essay English are never