The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-01-13
FINANCIAL NEWS AND
THE MARKET SITUATION


The course OF security prices last
Neck indicated that the markets were
on the verge of highly important devel'
opments affecting the status OF the rail-
roads and other great branches OF IN
dustry. Definite progress was made In
the work of putting the country back
upon "A peace basis and In broadening
the public demand for securities of the
real investment type The heavy over
subscription to the telephone notes and
bonds and the readiness of bankers TO
take up large bond propositions of merit
we're suggestive developments in an in
vestment situation which was made
doubly interesting by the announcement
OF the plan by which the railroad exccu-
tircs hoped to restore order out of the
growing chaos in the industry. proper
development of which is essential to
continued welfare OF all other industries
Whatever Congress does with the pro-
posal 10 provide n department Of trans
portation to supervise the railroad in
oustry. the suggestion offers basis for
intelligent action along sane lines, 1t
is an attempt to restore order In an in
dustry the working forces of which
have been demoralized by unprecedented
wage increases. Increase In expenses
has been 50 rapid that the chairman of
the Association OF Railroad Executives
told the Senate Interstate Commerce
Committee that freight rates would have
to be advanced more If wages and ma
| terials were maintained at the pres
cnt level OF costs. Mr. Cuyler charged
that the Pennsylvania Railroad had
been asked by the Railroad Commits
sion to take 1000 ffty-five ton cars.
which were not OF much service since
the roads business had been developed
through the usc of seventy ton cars The
road had not been consulted about the
purchase. and altogether $3.50, 600. 600
worth OF equipment had been ordered
by the Railroad Administration for
which the roads of the country were
liable. a Largo portion of this equip
mcnt is now idle.
A Critical situation.
! This situation is exasperating and in
many respects extremely serious But
II is better for the holders OF the sl7,-
coo, 100000 of outstanding railroad Sc
Curities to face the facts squarely that
steps may he taken to safeguard great
property interests represented IT Is
essential that this should be done without
delay. for many Of the roads must bor-
low heavily in the near future II their
Physical equipment is to be kept up to
standard. The revolving fund OF $780,
C00, 600 provided by the Government up
to the close Of last year had been drawn
against to the extent of S453.454Sl0.
IT is probable that most of the balance
has since been expended. Had it not
| Teen for advances OF S+2. 100000 to the
roads by the War Finance Corporation
N. the last two days OF the year some of
The companies might have faced serious
predicament. 1t is clear, therefore. that
If the finances of the roads are to be
fortified II will be necessary to restore
the roads to their owners under laws
that are favorable for their progressive
development.
There are RAINY features OF the pro-
osed scheme of regulation which will
-ypeal strongly to those who think that
the Interstate Commerce Commission is
an .overworked body and ought to be
relieved of some OF its pressing duties
should the series of regional commits
sions be formed to take over some Of
the duties now performed by Federal
and State commissions IL may be pos
sble to develop some of the reforms in
Tailrosding that have proved highly
successful in banking. The problem is
difficult. but II its solution Is postponed
there is strong probability that the
roads never may be returned to their
owners. Tho transportation industry
should not be ignperilled by the inaction
( OF those who ought to come to its rescue
} but who hesitate TO take the initiative
because they have not a we'll thought
cut plan to propose. A great crisis
has arisen through agitation of Govern
trent ownership idea as the only alterna-
tive, If Congress adopts Mr.. McAdoo' $
proposal to make a Ave year test OF the
present system OF Federal controlled rail-
,OadS, Most OF the uncertainties OF the
present investment situation have their
LASTS on fear of evils that probably
would result from five years more OF the
same sort of railroad management that
the country has been treated TO since
! December Is. 1917.