Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-04-13
Market for These Securities
Seems to Be Adjusting Itself
to New Value Lines.
HIGH-ClASS RAILROADS
BETTER FOR INVESTORS
Confidence in Administration Helps
Speculation-Railway Financ-
ing Daring Stroke.
BY w. G. NICHOLAS.
Special Dispatch to The Star.


Special Dispatch to The Star.
NEW YORK April 1.-THE stock and
bond market seemed to be in the finish
ing stages of a readjustment of prices.
having direct bearing on income returns
about per cent on bonds and 6 per
cent on stocks. The market has been
getting down to this foundation for a
good while. 1t is no disgrace now for the
best class of railroads to sell AZ per cent
bonds at a price yielding them net
around 4A to per cent. Issues that
were put out years ago at low inter-
est-bearing figure have undergone very
marked shrinkage during the year and
may be described as heavy at the de-
cline.
Railroad stocks of the very highest
class have undergone shrinkage only
less pronounced than many of the indus
trials of better grade. They, too, are
getting down to q per cent basis or
better for the investor. Pennsylvania.
which found a ready market for years at
figure which Melted the investor to
Az per cent. is down around ). New
York Central. which yielded only about
per cent until quite recently, now yields
around Az per cent net. Reading, about
quainted, yields about ) per cent at
present prices and so does Northern Pa
cific. Great Northern is doing a little
better than 41s per cent
\ group of roads embracing AtchiSon,
Baltimore and Ohio. Norfolk and West
ern and others of that class, which have
been slowly working into the list of
standard investments, are selling at close
to per cent net on the investment Lee
high Valley and Union Pacific 10 per
cent dividend payers are finding a mar
ket on a basis of little better than 8
per cent
Canadian Pacific. another 10 per center
yields only about IA per cent on the in
vestment. but that is a phenomenal prop
erty and the insiders are wild in their
prophecies for the future.
The market these days appears to be
adjusting itself to these new lines and
veteran students of financial conditions
are fixed in their theory that investment
capital will not be satisfied with perma-
nent lower returns than are now OBJ
tainable.
ket have not been startlingly important.
Those who have tried to base their oper-
atoms on fundamental conditions are
fairly we'll satisfied that the new rear
rangement of values is about over, and
that it will be good Judgment to act on
2 that proposition. There is no grand rush
or money into the market even at pre-
vailing quotations for the investment
account. but London is giving indica-
tons that it is about time to begin buy
Ing for permanent holding.
The taking of $100OO,OO0 of the new
Pennsylvania issue in one block is gen.
orally accepted as a safe criterion to go
by.. That single deal had great influence
on New York sentiment, and is accepted
as showing a change of front which will
lead to continuation of friendly atti-
tude toward American securities.
The stock markets in this country have
hardly yet recovered from the depression
caused by the overwhelming European
liquidation of last year, but there Is now
daylight ahead. judging from latest in
ternatiOnal advices
Interest in New Tariff.
From the surface political develop
ments in Washington have been the i'm
portant market factor this week 1t is
not impossible. however, that the worst
of this feature has been DISCOUNTED The
street. however. is temporarily affected
by the caterwauling of beligerent faction
leaders in the majority party. and 1t is
an unsettled and interesting problem
hereabouts just what their influence will
be in the construction of the new tariff
law. The attitude of President Wilson is
a subject of ceaseless discussion and
how he will come out of the battle is
point that everybody is talking about.
Admittedly he has made almost no mis-
takes I'm his handling of very difficult
and delicate situation. He is recognized
as the general public, as being a man of
remarkable fineSse and the belief grows
that he will win out, not necessarily in
full measure. but along general lines. and
that he will make good his claim to
commanding leadership.
1t is noticed that in his utterances so
FAR he has laid down no ultimatums as
to detail. but adheres heroically to the
broad principle that he and his asso-
ciates were elected by the people for the
performance of a specific proposition, and
that the pledge must be observed. This,
IL is argued. leaves plenty of latitude for
reasonab bic compromise.
1t is commonly held that he will de-
velop into one of the greatest little COM
promisers" that have been on the stage
of public affairs in many years. If this
it is quite possible that the next few
months may pass without serious dis
turbance
Mr.. Wilson is profoundly impressed
with the idea that common sense Will
rule. and that Congress and the people
will be satisfied with the adjudication
arrived at. Be that as it may. Wall street
is at this time friendly to the President
and his OBSERVATION-DISCLOSURES for the
best and not in deadly fear OF the worst
This is having an influence on specusa-
ton and investment feeling.
A pamphlet just issued by Sason
Thompson. the Chicago railroad scatisti-
clan and analyst. is being studied with a
great deal OF interest in Wall street. He
has a way of grouping his facts that Is
extremely enlightening and wonderfully
emphasizes the position that railroads are
being starved 10 death, and will fall
short of giving standard Service to the
public unless they are allowed to In
crease their revenues by the imposition
of higher freight rates. He finds thai
railroads with gross revenue of nearly
S3.UD.UC0OO are earning only 3.42 pei
cent on the traffic returns At last &C
count. railroads were paying S., $50 $50 90;
CA per cent of gross earnings) to L.
10000 employees. According to his emu
meration there are .. 1872 900 freight car:
in operation and 80, 152 passenger cars
Freight cars have increased in number
as per cent during the last decade ant
their capacity, as measured by tonnag,
carried, has increased 1913 per cent
This shows extraordinary increase IL
efficiency and proves that the manage
ments of railroads have struggled heroic
ally and with partial success to offse
the compulsory increase in cost of trans
portation. To show the increasing popu
larity of railroad investment, Mr.
Thompson mentions that the number O
shareholders in nineteen railroads in
creased 9s-I per cent In eight years.
Money Market Easier.
The new financing done this week b,
the Pennsylvania and st. Paul railroad
companies was rather daring stroke o.
business, under the circumstances. TIL,
market has been in a very wabbly stat,