Evening star., 1920-02-25
STOCKS SLUMP ON. F.
RENEWED SELLING
BY STUART p. WEST,

BY STUART p. WEST,
Special Correspondent Of The Star.
WALL STREET. New York. February
25-Speculative Wall street continued
very pessimistic this morning and con-
tinued 10 bring great pressure to bear
against industrial stocks. The extreme
|ly poor showing made in the annual re
port Of Republic Steel did much worse
than had been expected-contributed a
fresh element to the prevailing depres-
sion.
were past the fact that this prominent
company was able to earn last year
less than $1.50 a share toward its 6 per
cent common stock dividend was very
startling.
steer. Drop shakes Market.
fell over nve points and shook the whole
market by It's fall. The special object
Of the bear party. however. was to break
Steel common. the acknowledged lead
er OF the list through its former low
point Of % reached early in the month
In this effort it was successful.
AS Steel common made a new low
record for the year, the psychological
effect was extremely important. 1t en-
couraged fresh aggression by the party
working for "a fall. and it led to
hasty closing out OF long stock in which
stop orders had been placed on the sup
position that prices would not break
their February bottom.
AS on the previous days the rail-
way shares, especially the low-priced
ones. held up fairly well, but they
could not resist such extreme weak
ness as was displayed in the indus
trial quarter.
Entire confidence continued to be
expressed that the President would
siga the railway bill; consequently
the low-priced stocks, which are the
ones that stand to be benefited most.
were taken freely when they were
offered down point to points
Good buying also appeared in the
oils on the way down. But the steels
were very weak and SO were all the
stocks concerned with the automo-
bile industry. because of the belief
that the motor trade will in the
course of the year reach a state Of
overproduction.
Zinc Stoek..
The unfavorable turn in the general
market has naturally interfered with
a working out of the plans for indi-
vidual stocks. 1t has also deprived
these stocks from responding to in
dividual trade conditions which are
distinctly favorable. The zinc shares
fall within this category. The ex-
traordtnary way in which the zinc sit
uation has changed within the last six
months. and particularly within the
lated in this column. 1t has been a
change from prolonged overproduc-
tion to positive interpretation.
Accordingly. companies producing
zinc are favorably situated to con-
front the general business uncertain
ties OF 1920 Butte Copper and Zinc
Is better fixed even than any of the
others because in addition to it's pro-
duction Of zinc it is also a large pro-
ducer of ferro-manganese. The de-
mand for ferro-manganese in the steel
industry has so increased and prices
have risen so that the company has
started operations at two OF it's fur
naces and is planning to resume at its
other three.
Ann Arbor.
Another of the little roads which it
is figured by experts who have been
looking into the situation stands to
benefit to a large extent under the
CumminS-Esch railway bill is Ann
Arbor. In its last report the COM
pany showed net earnings of $4,000
on property valuation of $17.00O 900,
which Is better than 50 4 share on the
stock. 1t is estimated that a Is per
cent rate Increase will be needed to
bring the earnings up to the figure
set In tho railway legislation. Under
earnings will be over SO a share
Oil Stocks.
Advocates of the bear side. who still
think the industrials as a whole will
work lower. are. many Of them. in
clined to exempt the oil shares. Oil is
lpne of the industries where, despite
1.-THE great increase in output, there is
still an underproduction. and the ten
dency of prices is to ADVANCE.
Whatever NAV han n Ofhar lipoc
OF business during tho coming year
IT is pretty sure that the oil companies
viii have prosperous time of il, and
that their earnings will be better than
/ ever.
Therefore. there is disposition in
good quarters to pick up stocks like
Royal Dutch. Pan-American and Mexi-
can Potroleum on pronounced weak
spots like those of this morning
RumOrs of Discount Raise,
Wall street was full of rumors to-
day in regard to another raise in the
federal discount rate. 1t was the be-
lief in all parts of the street that
an increase would be announced % at
the REGULAR weekly meeting tomor-
row. However. there were some who
took the other side of the fence and
argued that another increase would
not help matters any because the last
increase is just beginning to show
that 1t is doing that which it set out
to do.
OF course. it has taken some time
for these things to be shown, but
now that liquidation in the COM
modify markets has set in their
credit, position will be rapidly cor
Rock Island.
Chicago, Rock Island and Pacific
IL one Of the roads which, because
Of its recent reorganization. stands
to benefit greatly under the new rail-
way legislation. During the time It
was in the hands of receiver the
road suffered cuts in everything. The
valuation placed or the company's
property by it's own experts is in the
neighborhood of s337. 100000. and this
is quite a bit less than the valuation
set by government experts.
1t is figured that a rate increase
Of close to 16 per cent will be needed
in the Rock Island district. and that
such an increase will show earnings
on the common stock, after all
charges for preferred dividends and
bond interest, of close to So per
| share.
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