Evening star., 1920-03-01
BUYING Of Stocks
IS MUCH BROADER
BY STUART p. WEST.


Special Correspondent Of The star.
WALL STREET. N. Y. March L.
1t Is seldom that Wall street has been
more confused over a stock market
situation than it was at the beginning
of business today. On the one hand.
bill and the roads had gone back to
their owners under optimistic eX-
pressions from all sides. This made
sentiment favorable to the railway
the Presidents action had been fully
anticipated and that the railway
shares all last week had been ad-
vancing and Thereby discounting the
news.
On the other hand the federal re-
serve bank statements of Saturday
were again disappointment, as they
had been every week for the last
month. TIE slight Improvement in
tho reserve ratio at New York was
of little Importance. because II was
due to the special deposit Of silver
and legal tender. which it was real
lied would be Offset by the gold with
drawal scheduled for this week.
The main point was that the
New York clearing house return
street loans was not followed up by
the federad reserve figures with the
i least evidence OF any similar curtail-
ment in commercial loans.
still in Much Doubt.
On the contrary. this class Of
credits was larger than ever and the
financial community was still in a.
| relief was to be expected and whether
I contraction of commercial credits
| would keep pace with the drain OF
gold which the banking authorities.
| regardless of consequences, insist
shall go on.
l Cali y,,onev loaned m renewaIs at 10
per cent. the same as it had been at the
close Of last week. Thus there was no
| response to the bank results so far
| the immediate money market was con-
cerned. But the stock market contin-
| ued to be pessimistic regarding the
stocks of all Industrial companies
which stand to be seriously affected by
a period of commercial liquidation and
declining prices. The leather shares
and the shoe company stocks were ex
Grafton.
Very Little steel Action.
On the other hand. the steels did
! little one way or the other because
| for most of these companies the out
| look is better for 1920 than were the
! actual conditions as they turned out
for 1919. For the same reason the
coppers were steady. The industrials
that were most consistently bought
were the equipments. for obvious
reasons connected with the return Of
| the roads and the anticipation that
| railway credit would be sufficiently
improved to permit heavy buying of
| cars and locomotives.
In the rails the immediate effect OF
the good news appeared to have been
discounted. but on moderate de-
| cline, which occurred under profit
taking sales the low-priced issues
| were well taken.
L A lam fn, I'll,
SON and extreme weakness on both
Hide and Leather and Central Leather
| were to be ascribed to a common
| cause. This is that all companies hav-
ing large inventories. and particularly
those which are heavily interested in
the foreign trade. are in an exposed
position. They would be the ones
that would suffer most by the com
mercial reaction and consequent de-
cline in prices that is being generally
predicted for the next few months.
The leather industry is always one of
situation is likely to prove no eXcep-
tion.
Peculiar Rail Action.
| At first the behavior of the rails
was a great disappointment to the
speculative community. A flood Of
outside buying orders had been
looked for over Sunday. as the pub
lies response to the signing of the
railway bill and the return OF the
roads to their owners But instead
Of orders. the customers OF wire
houses representing sentiment in the
whether or not the final passage of
the new legislation had been dis
counted. They got back word as a
rule that 1t would be well to hold of
and wait for some reaction on which
to buy.
i In consequence. profit-taking orders
which had been placed for execution
at the opening by some Of last weeks
buyers were carried out at a loss of
half point to point. the latter in
stocks like Rock Island and New
Haven, which had enjoyed the largest
gain last week.
One of the most complete Of the
estimates got out as to the effect Of
the new railway law upon industrial
roads has been published by Clark
| with reference to the amount which
would have been available for divi-
dends in 1919 had the necessary
freight increase been effective during
that year and assuming other income
and fixed charges remained as they
were in 1918.
According to this calculation the
following percentages would have
been shown: Atchison common, 1858:
Baltimore and Ohio, 4.92; St. Paul pre-
| Ierred, Z.74; ROCK Island, 9.25; Big
Four: ,::ss; Erie nrst preterrsa. 2s7;
nois Central, 13.49: Kansas City
Southern, z; Lehigh Valley. 11.7s:
Louisville and Nashville. 22.4s: Min
nsapolis and st. Paul, nil: New York
Central, 1911; New Haven, Alb; Nor
folk and Western, 1911; Northern
Pacific. 6.73; Pennsylvania, 4.66: Pere
Marquette. 1910; Grading, 11.36: St.
! Louis and San Francisco common.
1878: Southern railway common. 9.14:S
Southern Pacific 9.4S; Texas and.
Pacific IL; Union Pacific, 17.31: Wa
bash preferred. A. 5.o7; Western Pa
cific, 4.84.
1t must be remembered Of COURSE
in qualification OF these estimates. that
they are based upon the condition ex-
listing in 1919. when the governments
4 was routing trafflc as 1t pleased. and
as a rule favoring the smaller roads,
at the expense OF the larger.