South Bend news-times. (South Bend, Ind.) 1913-1938, 1918-01-06
Market ReOieW
BY the Financial Editor.

The first week OF the new year,
from a market standpoint, was in
.an respects satisfactory and reflect
ed a continuation Of the improved
sentiment that was so noticeable in
the closing hours of 1917.
1t became apparent to many that
the market was oversold, that
values had been unduly depressed.
that many securities had reached a
level that was inconsistent with the
most pessimistic view Of our finan-
cial situation; so that in one re-
spect the reactionary tendency pre-
vailing is "A readjustment in values
TO a basis more consistent with the
existing situation. and would have
and favorable conditions had not
developed 10 aid in reviving conf
dence in our securities.
Among the new market factors
which attracted most attention the
leading one. naturally, was the proc
lamatiOn of the president taking
control Of our railroads. It inspired
a high degree Of confidence in the
ultimate outcome of what promised
to be the most serious situation con-
fronting the country. The ultimate
solution rests with congress. The
direct benefits to the country will
be: With ali the roads consoli-
dated into one unified system un-
der a single director, transportation
facilities will be increased Though
il is likely that passenger travel,
especially where pleasure is involv
ed, will be materially curtailed).
The settlement of the labor prob
lem Will be made much easier, as
in all future conferences on the
subject the selfshness of either the
railroad management or the heads
Of labor unions will be eliminated.
Patriotism will be the dominant
note. and fair dealing will be the
rule for the settlement OF all labor
disputes.
Railroad extensions. improve
ments and enlarged terminal facili-
ties will require considerable atten-
ton, but will probably depend on
legislation that will provide the
financial assistance required. A
corporation TO take care of the rail-
roads finances patterned after the
Grain corporation and Ship Building
corporation would be a logical out
come. a serious proposition, that
will require either legislative action
or a further proclamation from the
president, is created by the peculiar
position of some Of the railroads.
There are some that are unfortu-
nately affected in an unfavorable
manner by the provision that the
compensation 10 the roads be based
on the average earnings for the
three-year period ending June. 1917.
To illustrate;
Missouri Pacific, which has re-
entity been earning between five and
six percent on the common stock
of the reorganized company, would
suffer very severely The earnings
prior TO the reorganization were so
small as TO make the average for
the three-year period equal TO only
about one percent
Wabash would also be affected
unfavorably because of the small
earnings prior 10 the reorganization
of the company. which can be seen
OF a glance from the following fig
ures.
Net earnings for the past year
close 10 S12.0OO.CO0: the year be-
fore they were close TO 1O.OOO.0 900,
while in 1915 they were less than
S5.ocO.OOO.
Some adjustment must be made:
otherwise the present arrangement
would be inequitable. permitting
the government to control and use
a road practically without compen-
sation-whiCh would be equivalent
TO confscation.
4 favorable factor was the an
nouncement that prices would not
pc changed for iron and ore. coke.
pigiron. steel or steel products. II
is likely that .he same policy will
be pursued towards copper. and
while the prevailing prices can
hardly be called nigh. n view Of
the constant rise in the cost OF pro-
cLction. nevertheless. a stable price
Is more desirable than constant
changing. unless that change should
DO favorable 20 the producers and
manufacturer.
The money situation is one to be
kept constantly IN mind Hereto