Evening star., 1920-11-23
SHARP EARLY GAINS
CAUSE PROFIT SALES
New Haven Made Leader on
Bear Movement-Short
interest Setuced.
BY STUART r. WEST.

NEW YORK. November % Especially.
Convinced that the sharp rally Sat
urtiay and yesterday meant that The
stock market had struck bottom. outside
investors ard spectators rushed in to
buy at the opening this morning. The
execution of these orders carried prices
forward in some instances as much as
a point from last nights closing.
Then heavy profit taking set in and
many stocks which had been bought
on scale orders partly for the purpose
of support during last weeks demorali-
zaiion were offered for resale.
inasmuch as the short interests had
been much reduced and,this sustain
ing element thereby weakened. a re-
action set in which was fairly gen
rral in its scope. violent fall in
New Haven stock was an unsettling
influence and helped along materially
n" reaction in the Junior rails This
hreak in New Haven was due to tn.
statement made yesterday by counsel
Of the road that the New England
lines would be in Il very bad way
and most of them would be forced
| INTO the hands of receivers unless
substantial further additions to tn.
| present rate scale We're allowed
The general opinion around the
, street was that prices at the opening
lhiS morning had gone up too fast to
hold
II was everywhere felt that the
worst of the break was over and thai
the bottom figures of Friday and Sat
urday were the lowest that were to he
looked Tor in the great majority of
stocks.
But il was pointed out that the usual
sequel after prolonged decline has
| mainly been checked is a rapid rebound
81 pot
secondary reaction.
Expect Slow Trading.
Ihis sometimes goes far enough 10
carry the market down over the great
er part OF its first recovery Some.
houses expressed themselves as ex-
pectlnS the market TO make douhi.
pottom. but this view was considered
f"lher extreme in other quarters. A..
agreed that after prices had had tiiriI.
setback from the initia rally the mar.
ket would settle down into d.
i period that might extend a conSid,f
| able time.
New Hnven's Position.
The New Haven is. Of ooursa. = su.-
ci.ti case IL is case of COMPANY
with huge Indebtedness. which is
.rEins TO float a new issue of sccuri-
ties 10 meet refundings and other OBJ
lisations that are imperative If i;
does not succeed in floating these new
| securities it will be in a rather bad
way. Other roads, even those of com
paratively poor credit, are not in A
similar position and there is no rea
SON why their stocks should be se-
riously affected by the drop in New
Haven. Still. the figures given by the
New Haven attorneys are very start
ling.
The commerce commission. in its SEN
tember decision. had supposedly dealt
most Eberally with the New England
lines. The increase in passenger rates
was supposed to be particularly favor
! able for the New Haven with its nm
usually large percg ntase of passenger
traffic.
IL it is true. as the lawyers OF the
company say. that the New England
lines will earn next year on'y $4,000
600 net, whereas. they should earn
S'0.000.000. in order TO show the 6 per
cent return on property value it natus-
ally raises some uneasiness as to wheth-
er the estimates of increased earnings
of the railroads generaHy-the estimates
upon which Wall Street has been reck-
oning for the last two months-are not
too high. 1t was this mistrust which
was reflected in the market for most of
the low priced rails today.