Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-08-24
MARKETS ACTIVITY
CENTERS ON RAILS
Southwestern Roads Securi-
ties Seem to Have the Call.
Feature of Law.
BY STUART p. WEST.

fedture OF Law.
BY STUART p. WEST.
NEW YORK, August 24.-The dis
position to favor the railway shares
was again the main feature in the
stock market today. Along with large
ly increased trading in railway stocks,
particularly the low-priced issues,
heavlly: in fact, it was the liveliest
day which the railways bond list has
had since it turned for the better
three months ago.
Evidently the suggestion had taken
hold that moderate speculation in
rafiWay securities might be permitted
because these are more acceptable
than industrial bank loans and be-
cause they have not discounted to any
great extent the benefits to be de-
rived from the new railway act and
the extremely liberal award in the
freight rate cases.
me movement in the induStrials
confirmed the impression Of yesterday
that that section of the market is set
ting down into a comparatively mar
row trading position.
Business in this class of stocks was
relatively small, the price tendency
during the greater part of the time
being irregular and uncertain. AS a
rule the industrial list went lower,
but except in few instances the
losses were slight, and later there
was a rally.
Mexican Petroleum and the pam
Americans were not nearly as sensi-
tive as might have been expected to
the reported threat of the Mexican
government to place an embargo upon
oil exports if the companies did not
come to terms in the tax controversy.
Sugar Stocks Firm.
1t was also again very noticeable
that most of the sugar stocks held up
firm. despite the extreme unsettle-
ment in trade conditions which cul-
minated this morning in the an
nouncement by the American Sugar
Refining Company that it had with
drawn, for the time being at least.
from the market. presumably because
IT had become Improbable to do bust
ness under existing circumstances.
The upward movement in the rails
was very uneven affair. Buyers were
evidently making their selections
with great caution and with careful
reference to the estimates of what in
dividual properties will earn under the
new rate schedules. Reading, South
ern Pacific, Union Pacific, Chesapeake
and Ohio and New York Central were
again the leaders Of the old Line divi-
dend group.
Rail Merger Plans.
One thing which has not been given
its due prominence in the discussion
of the railroad situation is the mer-
ger phase of the new railroad law
The section of the Esch- Cummins
law which turned the railroads back
to private ownership and which has
brought about large increases in rates
so that the rails might thrive and
keep up with the growth of the coun-
try abrogates. SO far as they are con-
cerned. the Sherman antitrust law
and allows the regrouping of lines
which heretofore has been looked
upon as in restraint of trade.
Rail Merger Plans.
1t is felt by the best judges of the
railroad situation that until this phase
is reached there will be no big
bull movement in the rails OF course
these same judges are inclined to the
opinion that there will be advances in
special stocks under the stimulus of
especially attractive earnings made
possible. by the rate increases, but
that the real big push will be de-
been given time to demonstrate its
possibilities in the way of revenues.
Uncertain ~ Yet.
Just what form these amalgamations
will take is as yet impossible to say.
Even railroad executive declare it
would be premature to discuss the
question. The new law as it is UNDER
stood in Wall street permits the con-
solidation of parallel roads, which
means that some OF the big trunk lines
tn to nd hyyvy
down their overhead and in many
other ways reduce expenses. while the
ombination could show proportionate-
ly increased earnings. 1t was pointed
out by one man acquainted with the
situation that these mergers will I'M
changes of shares from one type into
another and at the same time will
hold out dividend possibilities that
are not thought possible at the pres
ent time
Sharp. Rally in Indastrials.
The railroad division absorbed most
Of the interest through the first half
Of the session. but the industrials oc-
cupied the center OF the stage in the
later dealings.
Therapidity with which. these stocks
came back in the last hour and half
of the trading was a revelation and q
decidedly unpleasant one from the
standpoint of the bear operators Of the
reality of the change in the markets
position.
The short interest. already sufi-
GENTLY heavy, was. considerably in
creased without any fresh supply OF
real stocks coming out. The result
was that when covering purchases
started toward the riddle of the aft
ernoon they found the market COM
paratively bare Of offerings within
d point or two 'IpiEts of the low
prices
The rapidity with which Mexican
Petroleum and the Pan Americans
ran up. despite the apparently dis
turbing Mexican news. was the in
cident which more than any other in
fluenced the change in sentiment
But Baldwin Locomotive. American
Locomotive. Car and Foundry. Beth
lehem B, Republic Steel and other
leaders ran up with almost equal
violence and Steel common, on what
was evidently enormous short cover
ing. went through its previous high
since the turn for the better ten
days ago.
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