The Washington times., 1912-08-18
MARKET SHOWS GOOD UNDERTONE
DESPITE GENERAL PROFIT TAKING
Prices Liquidation Top
ated-ndusrias Doing Better Rails Equipment
~ Leading Betermens.
BY JOHN GRANT DATER.
Special Financial


NEW YORK, Aug. IS, 1s12-Although
not measuring up to the full expecta-
tions of the bullish element, which ever
since the publication of the August crop
report has been indulging In some high
ly extravagant predictions, the stock
market gave a very good account OF
itself last week. Business underwent a
material expansion and prices despite
one rather sharp reaction on Thursday
ruled consistently strong. The best
technical feature or the trading was
the manner in which the market alb
sorbed stock. for distributive selling on
the advance was quite extensive, while
the least satisfactory was the general
inactivity of railway shares, which re-
manned practically unchanged while
miscellaneous speciaities were moving
UP.
This cleavage in the market between
railway and Industrial securities stands
out In strong relief on each little burst
of activity. 1t must be acknowledged
that 1t imparts an air Of unreallty to
the movements. at least to brokers of
the old school. who have always been
accustomed to gauge the ebb and flow
Of general industry bv the railways.
Although industrial shares have been
long enough listed on the market and
in numbers large enough to acquaint.
the old-tme brokef with their merits
and although the best barometer that
Wall Street has is the stock Of the Unit
ed States Steel Corporation. some of the
ancient prejudice against industrials
still fingers and as Is well known such
| shares are still Disseminated against
as collateral In loans, by practically all
banks.
Industrials and Railways.
1t is a matter of common knowledge
| that at the present time industrial cor
| porations, as a class, are faring far bet
| ter than the railways and also that as
| class they withstood the strain of the
| pnic of 1907 better than railroad cor
| porations that Is. among important
| companies OF large capitalization, there
| were fewer insolvencies among manu-
| featuring and trading concerns listed
on the exchange, than among railways.
| Despite this. banks in making ordinary
/ loans, require CustOmarily 20 per sent
J of railway shares, ob1ecting strenuously
| to more than 20 per cent of industrials,
J and it Is usual to charge rates higher
! than prevailing quotations for an all
! industrial loan"
1 Such is the force Of tradition in the
| financial market. and It works out odd
| ly at times. for II it comes to a ques-
! ton of marketability. the two issues
| that possess that quality to the high
est degree. which can always be sold at
| prices close to market quotations, are
| industrial shares. namely, United States
, Steel and Amalgamated Copper, AL
I ga hv a ra a " q
| show such low vitality at this time are
well known the prejudices and tradi-
tions Of the financial district are so
| strong that the mere fact that railway
| shares remain inert has a harmful ef-
| feet on the entire list and Is used to
| dscredit the reports of industrial i'm
provement.
A Retarding Influence.
How can general business be in good
shape, or how can improvement be of
| a substantial and enduring character,
| II the greatest of all the country's in
dustries. that of transportation, Is Ian
| guishing?r One encounters that ques-
j tion continually In drifting around the
financial district and II must be admit
ted that it is somewhat difficult to ans
wer. 1t was to overcome the paralyz-
ing influence of this. that the effort
was made during the week TO stimulate
some activity in low-priced railway
shares like Erie. Southern Railway.
Missouri. Kansas and Texas and some
others. but brokers who took an active
part in the movement admitted that
the stocks bulled very hard" and the
moment the special movements ceased
the issues, turned over and went to sleep
again, verv much like a tired out man
aroused out of an unfinished nap.
In fact, the market in general, des-
pite the price improvement. gave some
signs that the awakening was untimely
for aside from some buying accredited
to Western interests. which was by nc
means an unreasonable conjecture
there appeared to be no enlargement
| of public interest In fact, one sapient
explanation of Thursdays reaction was
that buying orders had failed to come
into the market in sufficient volumes
to absorb the offerings. From this
one NAV appreciate how hard pressed
satisfying explanation for the mar
ket's performances. However, If an in
itiative is taken one would naturally
look to the West for it. for the mos
and business activity come from tha
quarter and that they are well founded
in the really brilliant harvest prospects
admits of no reasonable doubt
Washington Developments.
The harvest advices of the week anc
in fact all basic trade information wal
especially encouraging and stood ou
in very agreeable contrast to the de
velopments of a political nature, particu
uarly such as emanated from Washing
ton. which were of any but a reas
suEinG character. Not unnaturally, tn,
rank and file in brokers offices wer
gratified with President Taft's veto o
the bill revising the steel tariff, but oil
a later occasion they were rendered
correspondingly uneasy over the pros
pect of the repassage of the bill owe
the veto, this of course in consequence
of the alarming picture which the Presi
dent drew of the results to the industr"
and to the capital invested therein,
the bill should become a law. The ac
tion of the Senate. finally. in sustainin
the veto met with general approval
I but any beneficial effects which Nigh
have reflected in the market were off
set by the approval by that body o
the conference report on the Panam