Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1917-11-17
HONOLULU men BUY AND BUY RAILS:
WILL PROFIT IN NEAR BYE And BYE
Bargains in High Grade Rails Pentifu-Despe Threatened
Strike Local investors Go Heavily Into Railroad Stocks
Rally is Expected With New Year
IRY Kick r. TAPEA

cause is bound to cause at least
slight rally in rails.
Second Reason
The second reason for the, recent
slump is the enormous amount OF
selling short" which has been going
on in the New York market for the
past four. weeks. The governors of
the exchange took unprecedent &C.
ton recently to curb this wholesale
bearisf movement which might have
ended in a panic.
The movement was charged to Q
German plot to wreck prices gem
orally but while this may have been
so. it is more likely that there was
a pool back of the work of attempt.
ing to break the market for some
other purposes than merely that of
helping Germany by causing financial
wrecks on the American seas of
finance.
The action OF the governors in
keeping tab on short selling caused
the market to hold firm but even
this measure is not likely to stop a
gradually declining market. Further
slumps in other securities are ex-
pected and while rails may slip in
the next few weeks to new low
levels there is bound to be rally
if the freight rates are raised and
experts predict that freight rates
must be raised. The rally that will
come out of an action such as an
increase in freight rates is bound to
cause small buying movement
which the bulls will no doubt make
the most of.
Third Reason
The. third reason for the present
decline is the high cost of operating
railroads. Prices have increased for
all materials and the roads are not
even able to get new rolling stocks
at any price The wear and tear Of
rolling stock together with the in
ability of replacing the older stock
is causing depreciation in the value
of company assets which has a
slight bearing on stock prices. The
high cost of operating would be
counteracted by an increase in
freight rates and as the experts build
their hopes on this it may be well
to follow out their argument as to
why an increase in freight rates is
pound TO come.
The Argument
In brief it is this: The government
can do one of two things-increase
freights rates on short hauls or take
over the railroads for federal opera
ton, is their opinion. For if wages
90 up and the rates remain the same
the experts declare that the roads
will simply go into bankruptcy and
the government will be forced to
take them over to carry on the work
of transporting ammunition and sup
plies. Should the government take
them over it will be forced to pay
the companies a handsome figure
which will have good effect on the
stocks. If the government. doesn't
take them over it will have to per.
NIT an increase of freight rates.
On this basis the experts work out
their conclusions that a rally in rails
must come in the near future and
therefore those who are buying now
will profit in the near bye and bye
besides receiving good interest Gn
their money while waiting for the
stocks to advance.
The following table gives coed
idea of some of the bargains now OBJ.
tainable in high grade railroad stocks.
OF the sixteen rails shown below
cnly four are now above par while
when the war broke out il of them
were above par: