The sun., 1916-11-16
FINANCIAL NEWS
And COMMENT
Railroad Shares Weak; Spccu-
lative 1ndustrials Active;
Specialties Up.
POOLS CHURN MARKET
Investment Demand Lacking
in Standard Carriers Owing
to Uncertainty.
POOLS CHURN MARKET

Weakness In standard railway shares,
activity In speculative industrials. a
churning OF the market by pools eager ia
distribute their lines. sharp upward
movements in specIaities to the accom-.
paniment OF slusglshncss in standard is-
sues and n lack OF investment demand
for both railroad shares and inflated in.
dustrials marked the stock market yes.
terday.
| At the opening prices were irregularly
lower Traders who had taken on stocks
on account Of the political canard Of the
previous day hastencd TO dispose OF
them. and there was much short selling
because Of the exposure Of the hoax. The
market then rallied. sold of again and
continued irregular until the close. Steel
common. In which the turnover approxi-
mated 175.0e0 shares. huctuated back
and forth and finally closed with a net
gain Of u.
The railroad shares we're heavy from
the opening to the close OF the market
The new generation OF SPECTATORS
grown rich over great upward move.
ments In war stocks and other indus.
trials. never has cared for these stand.
ara dividend and investment stocks. The
appeal safety first" has not yet inf,u.
enced spectators who have accumulated
enormous profits on stocks that yield
much less In income. but have performed
much more sensationally In the market
That more money may be made out OF
the market from industrials than from,
seasoned rails 10 q good excuse for the
heaviness Of the securities of railroad
7 hoN a. xnA
bountiful surplus prohts as actually to
be able 10 finance themselves.
The reason Is sufficient as explaining
the comparative inactivity Of the rail.
road stocks. II does not account for the
paucity OF orders for them from In.
vestors. New York Central. for ex.
ample. has earned IS per cent. on the
stock. and prospects are good that the
dividend will be increased from 8 to {
per cent. Mt the December meeting oi
the directors. Yet though foreign iiQui.
dalton Of these rails has ceased o,
abated. investors seemingly do not cart
for New York Central or other standard
issues Of this character.
| The lack Of investment demand car
be explained only by belief aypone
bankers and railroad managers that the
position Of the railroads Is preca rious
Railroad earnings have been and still
| are breaking records. but investors anf
spectators who buy them for tho lcns
pull look far into the future and politi
cal developments to them are dark. a
to the casual observer earnings ar,
bright.
For example. investors cannot but b,
impressed by the determination ant
energy 4 &ith which the railroad cxecu
tives are contestug the eight hour law
Practically all Of the railroads engaged
In this controversy are abundantly abb,
to pay for the moment the higher wage
exacted by this law, but for their futur
existence they cannot submit to the man
agement OF their affairs by blackmail.
Pool distribution OF industrial share
was so obvious as to attract commen
In every conservative Stock Exchang
house. Some OF the pools seemed to b
progressing successfully. All hoped 4
emulate the example Of the pool in Cen
tral Leather. which acquired stock IA
below par and sold some OF It out q
high as 1e3.
None Of them yesterday quite matche,
that performance. The difficulty en-
countered BY the managers Is an in
creasing realization of the fact that In
vestment demand will no, follow price
to inflated levels. and that investmcn
demand Is an essential factor when a
now bear parties as we'll as bull pool
are active. aggressive and strong.