The sun., 1918-08-13
FINANCIAL NEWS
AND COMMENT
Investors Turn to Rails on Ex-
pcctation of Satisfactory
Rental Agreement.
REACTION IN INDUSTRIALS
The Pool Provides Moderate
Amount of Call Money; Time
Funds in Scant Supply.

Interest In yesterdays broad and rel
atively active stock market shifted from
the industrials to rail issues. the latter
making gains OF to 2h points In the
active list and the former suffering a
moderate reaction from the top prices
reached last Friday and Saturday.
While the total volume was In excess of
400, 900 shares. IS per cent. OF the bust
ness being in United States Steel, pub
lie participation was light and invest
ment purchasers turned their attention
to the rail stocks owing to the nearby
contamination of the rental contract.
Th2re has been quiet accumulation of
this class of stocks. but yesterdays
comparatively big accumulation has not
been duplicated for many weeks. There
was scarcely enough money available to
finance the trades in industrials and
rails at the same time, SO that trades
in the former ebbed when tie latter is
sues sprang into prominence. There was
no available supply Of time money. and
the money pool was called upon for
moderate amount of funds on call. While
most of the active industrials reacted
from a point to a point and~a half the
undertone at all dimes was good and
the technical position was improved by
the slight downward movement.
The stringent money situation and the
desire to keep speculation at a minimum
without interference with the investment
buying which goes on daily. at times In
creeping fashion. was the dominating
factor yesterday. The war news indi-
Gated that the advance OF the Allies had
been slowed up by the stiffening Ger
man resistance. the element Of surprise
having been eliminated for the moment.
Ihe new factors which induced strength
throughout the rail list were the report
that the railway rental contract would
be signed sealed and delivered within a
few days and inside information that
favorable developments for rail investors
supplemental to the contract are near at
hand. This is expected to take the form
of special treatment for undermalntained
roads with maximum limit on deduc-
lions from the standard return or ex-
cess maintenance as well as an expected
credit allowance for depreciation on
equipment purchased by the Govern
ment.
The feature OF the individual rail
issues was the rise of Atch!son, Ca
madam Pacific, ST. Paul common. Rock
Island common and s per cent stock
and Northern Pacific to new high marks
for the year. Not an active rail stock
| failed to advance, but the larger gains
were made by st. Paul issues. Canadian
Pacific, Baltimore and Ohio, Chesa-
peake and Ohio. Rock Island, Pittsburg
and West Virginia and Union Pacific.
United States Steel. after making a
! new high for the movement at ll2L.
within y of the years high. lost II,
| points net on the day on quiet trading
Baldwin, of ~ points, showed the
| largest net decline. Other equipments.
steels. oil and shipping stocks. declined
| moderately. On the other hand Ameri-
| can Ice was a strong feature. rising 8
| points to 35. compared~wth 35S the
years high. Burns Brothers gained a
| point, but generally the Industrial list
was reactionary, There were no de-
velopments of special Importance that
would affect industrials unfavorably.
In the bond list Liberty 3ISs made a
new high for the year at 1oo.o6. COM
pared with 10000. the best price on
record made in October. 1917. The
value of this tax exempt issue is being
enhanced by the proposal favored by
| the House Ways and Means Committee
to tax income from State and municipal
| issues. While this tax is not expected
TO be retroactive II will IL adopted,
diminish the amount of tax exempt
issues available for purchase by the
possessors of large incomes.
There was no supply OF time money
yesterday and as a result no time loan
renewals were consummated. Call
money loaned at 6 per cent. on mixed
collateral and Ga per cent. on all in
| dustrials, with the exception OF a few
loans at 50 and Ga per cent. re-
spectively. The money market was
stringent in the late trading and the
money pool was called upon for a
moderate amount. The short covering,
having been accomplished on Friday
and Saturday, sterling and francs eased
somewhat yesterday Neutral rates,
particularly pesetas, were also easier.