Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-08-17
WHY LOCAL STOCK MARKET
GRINDS ON LOW LEVEL S
Happenings in the Past and Presnt Predica-
ment Reviewed-Brokers Look for
.: Better Conditions Before Long.

BY I. A. FLEMING.

g. local stock market. with the excep-
S"tion of a very few stocks. at or not
- Tar from the very lowest prices of the
= year.
.Graphophone common. Potomac
Electric general IS and a few other
stocks. bank shares and bonds have
managed to hold a stronger position
- In the trading. but as a rule the
current range is grinding on the low
level.
And during the period when these
evidences of weakness have Deen
-. noticed the New York stock market
/. has been showing the strongest KIM
Of a front to the bears and scoring
large advances
II is a fact that Washington has
never sympathzed with the uptrend
In New York stocks. although 1t ire
uuently responds, apparently to a de-
cidedly weak feeling in the major
.. market
o.. For years there has been a perio-
dicaldical unfortunate happening
:. every now and then in the local
- The La Toilette law that checked
possible combination of the pubic
utilities of the District five years ago
may be held partially responsible ior
the failure of the Washington Ctlil-
ties Company to put across the prof.
ects for which it was organized.
In sequence that law may be par
italy charged with the serious conol-
i. ttion of the street railway company.
The men who were back of the
washington Utilities Company SEEM
ed to command ample capital to nave
gone through with their ventures pu.
for the check which destroyed, aloeo
by other influences.
Unexpected Upsets Calculations.
II is the unexpected that upsets cal
cuIations. without notice of intent
. Or II discussion of the need therefor,
Congress cut the price of the product
of the Washington Gas Company, al
,mittedly a minor expense In the nome
i.of the economical, and the shares Oh
the corporation were injured tnereoy-
True. the Public Utilities Commission
has restored the price, but the war
was on, and the high cost OF every
thing that entered into gasmaking
clipped the profits to a point where
the dividend had to be cut.
Far-seeing management OF the Cap
ifal Traction Company clipped l per
cent from the dividend OF the Eap.,al
Traction Company, even while the
Washington Railway Company was
paying Z per cent on its common
stock and engaged in serious strus-
gle with organized labor.
A cut in the dividend OF the latter
was forced, and with the increased
cost of operation and materials
passing of the common DIVIDEND was
finally necessftated.
D.. Actual default on interest charges
!fs dreaded but may be avoided; the
preferred shareholders became I'M
easy and some imperative orders to
sell were placed with the result OF
serious depreciation in price. although
for the entire year to date but lis
shares of the common stock and 2,317
OF the preferred have been traded In
on the local stock exchange.
- . Worked Hard for Merger.
,,;Gpominant men on the directory of
the railway company worked like Tro-
JAMS for q merger with the Capital
Fraction Company, and would have
shown more wisdom had they accepted
the Capital Traction Company's terms.
= which unfortunately they did not.
1t was possible then but 1T did not
looks at that angle like q wise prop
osition.
The failure of the United States
being costly to the depositors. hurt
tie shareholders badly. The quiet
passing of the Misunderstanding
Bank overnight. without ripple,
without loss to depositors, was cir
jS1hstance against shareholders IN
,td6ests.
4. Emerson Steam Pump. capital stock.
$1,000, 900, with 100000 per cent
bonds. proved another jar of minor
Importance to our local market
broader Field in New York.
The broader field of the New York
market offered more attraction for
investors with a speculative turn OF
mind. and the bond markets for the
investors with a conservative trend OF
mind.
Then. too. we have seen two big
bull markets fatten out, ''as fiat as
my hat, hatter than that"-Washing-
ton Gas and Railway common sky
:rocketins up around 81. Remember
Just at present all matters locally
seem to be ironed out, but the one
big proposition All evidence is
against the contention that pre-war
rates for street railway transporta-
!tten are just and equitable at TINS
market today, and until the COM
mission meets the requests of lead
ing trade bodies and railway officials
10, move up these rates, small bet
terments are possible.
Shareholders would. 1T Is beilevea'
gladly take q clipping of their divi,
bends, not a passing: the preferred
shareholders are entitled to 8 per
cent cumulative. but the point now
ise-to stave off failure on hxed
charges, which would bring bond
holders in as preferred creditors.
II is the easiest thing in the world.
In the days of prosperity. to have
bonds engraved and to sell them, at
aePriee; WAC. a,ncu,. thin. in the
world to pay fixed charges in days
Of depression
Wisely managed is the corporation
that in the days of prosperity remem-
bers to curtail fixed charges against
the days of adversely.
Limited Investment Field.
In as limited an investment field
as Washington. the same people fire.
euently invest in several securities
that is nothing more than natural
the habit of not putting "all ones
,esgs in one basket
There is some little community OF
interest among the capitalists, IN
aWesiors in Capital Traction. Wash
ington Railway and Electric, WASH
fngton Gas and some bank stocks
have been put to considerable incon-
creased income taxes. while the small
investor has suffered from lessened
return on his funds.
Some securities have moved SYM
patheticaily downward. whereas
'fhete was not even small reason for
toward conditions
Brokers, members of the local stock
sexchange. do not hesitate to advise
"HBlHers of Railway preferred to hold
their stock on the theory that con-
ediriens cannot he much worse. 81
Jyon{d with stock at GO '"