New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-05-10
Wednesday. May ., 1911.

Public interest in the stock mar
ket has been aroused after a long
period Of stagnation. but in way
which is far from satisfactory to
Wall Street. In a majority Of re-
cent sessions dealings have con-
sisted mainly Of transactions be-
tween professional traders, but to-
day outside" participation played a
very important part in the market.
Unfortunately it took the form of a
wave of liquidation. which carried
values several points below the
close on Tuesday. All groups of
stocks were affected. the active in
dustrials showing losses averaging
between and points. but sell
ing pressure was eXerted more hcav-
lily on the railroad shares. among
which losses ranged from fractions
to above G points. OF the seventy
American railway issues traded in
during the day siXty-eight showed
losses. the Delaware & Hudson. with
an advance to III on President
Loree's favorable statement. being
the only noteworthy exception to the
general tendency.
The average price Of group of
fifteen high grade railroad stocks
now stands at a fraction above JOG.
Before this country entered the war
it was about 113. At the top of
prices in 1918 the average Of the
same stocks was no less than l35.
That is to say, in spite Of the fact
that 1916 was the most prosperous
year in the history of the railroads,
and there seems to be good prospect
that the roads will get the IS per
cent increase in rates for which they
have applied. Railroad shares are
now valued in the market place at
nearly % points below the level at
which they stood in 1913, and it
should be remembered that they
were even then complaining that
rates were inadequate and demand
ing a per cent increase, with, so
far as could be foreseen, much less
chance of getting it than they have
of obtaining the 10 per cent increase
now under consideration.
1t is hard to believe, taking every
thing into account, that the public is
selling because it is losing faith in
the railroads, though such a de-
velopment would not be surprising
in view Of the exaggerated claims
of poverty made by railroad leaders,
one of whom has gone so far as TO
say that unless the railroads plea
for higher rates receives favorable
consideration railroad securities will
not be worth holding. What is a
more plausible explanation of the
heavy liquidation of such securities
is, first, that holders are selling them
to obtain funds in order to subscribe
to the war loan under the mistaken
idea they are performing a patri-
otto duty, and, second, that persons
with large incomes are selling them
to subscribe to the war loan, but
with less patriotic motives. They
are doing it so as to shift the risk
to some one else, because a az per
cent tax exempt government bond
not only is the safest security in the
world but probably will yield as
much as. or more than, security
which pays 5l3 or 6 per cent gross,
subject to the income tax. 1t is diff
ficult to say just how much selling
has been of that character, but 1t
seems to have made up the greater
part Of the liquidation. How long
it will continue and how serious the
effect will be upon prices is impos-
sibe to say. There is a momentum
to such movements which it is diff