Evening star., 1912-07-07
Railway Managers at Fault.

There was reason for the failure. 1t
was not q reason that had to do with the
| market for railroad securities. It did not
reflect upon the intelligence Of those who
had figured that upon the basis of net
yield standard railway stocks ought to be
attractive to investors. The essential
| thing. the dominating influence-the de-
pressing factor-had to do not at all with
either the physical or financial status Of
the railroads. What measured and what
defeated that particular betterment cam
paign had to do with the attitude Of rail-
road managers.
Not merely for months past, but for
over a period of several years, there has
prevailed q disposition In high railway
circles to chant pessimism. 1t has been
urged-and particularly and emphatically
1t is now urged-that the railroads Of the
country have been put by the politicians
into a class by themselves-where they are
disturbed, discredited. damaged, by reason
Of the fact that they are held rigidly
to minimum charges for the service they
no disbursement check. Rates do not
deviate-or when they do change 1t must
be downward. so runs the railway man.
agerial statement. For construction ma
is necessity to pay continually higher,
higher and higher. Say the railroad rep
resentatives: I'VE have rates fixed by
the politicians who know little Of
actual business elements. Thev are en-
powered to limit us to charge s. much as
q maximum-are continually issuing or
ders cutting the first fixed rate down
lower and lower. And upon the other
side they listen sympathetically to every
body who has any grievance against US:
they reduce hours Of service; they expand
pay rolls; they simply make us q target.
Against such other overwhelming handi-
caps no business interest ever has sue
ceeded or ever can contend"
In so presenting this situation it is not
the purpose of this review to accept or
represent any pessimism theory. The fact
OF it Is just stated here because 1t is the
fact. Investors realize it. And for q long
time past investors have been rejecting
Its influence.
Public Declines Railroad Stocks.
In Wabash. in the entire group of
Gould stocks. in all the Hawley list-in
other conspicuous quarters-the force of
this factor shows. The public 10 declining
to buy railroad stocks.
In the industrial quarter Of the stock
market there Is a different situation.
Many of the industrial stocks-now tested
ARE possibly cheap. United States Steel
the bargain roster. Regardless Of the
fact-and do not doubt that 1t Is a fact
that there is an unwieldy interest in
Steel common stock, l believe that there
l6 DO0nQ 10 Dc a material advance III lIS
quotations. 1t has for a year and more
been the professional speculative fashion
upon the stock exchange to sneer at Steel
common. to forecast deplorable condi-
tons. to prophesy disaster. And in fair
ness it may be said that some prophets
most conspicuous have undoubtedly been
acting in good faith. This, though, is
short of what as whole rules.
Iron and steel trade conditions fell into
bad shape months ago. and at times 1t
has looked as IL what was bad might
become very much worse. But the fact
10 that when the outlook was bluest there
came revival of sudden-and this re-
vival has not been maintained merely, but
has continued and expanded. till now we
have q metal situation superior to any
thing we have known In dosen years.
This metal situation is not confined to
iron and steel-has to do with copper.
That metal has risen largely. quickly.
Business demand has been the influence.
And 1t is in this phase Of the situa-
on-fundamental-that there 10 warrant
for the confidence which this review ex-
presses that Improvement already started
Is destined to rise tremendously beyond
anght yet regarded.
Not Time to Go Short.
This possibly may not be the time to
buy. to load up heavily. This certainly
Is not the time to sell, to 60 short, to
90 oy,ohl In ho nd ~ c0