Evening star., 1920-02-11
INDUSTRIAL STOCKS
DISPOSED DTORALLy
Recovery Delayed by Weak.
ness of Railway Shares;
Market Upset.
By STUART r, WEST.

WALL STREET. New York, Febru-
airy 11.-From the outset this morn
ing the industrial list was disposed
to rally. But recovery was tempo-
rar1Iy held up by the continued ex-
treme weakness in the railway
shares. Attention was again drawn
10 the fact that even at present
prices railway stocks look very at
tractive to the remaining foreign
noioers because of the enormous ap-
probation of the American dollar and
therefore of everything into which
the dollar can be converted.
Foreign liquidation plus the selling
out or railway stocks in domestic
bank loans affords the most reason
abie explanation for what has pug
zied many people during the last few
days. namely. the extraordinary out
pour of these railway issues at what
according to all past records are panic
prices.
Whole Market Upset,
Naturally with Union Pacific crash
ing down below III. with Southern
faclnc on another two points to nearly
%. and with similar violent declines in
sucn oid-tlme standard dividend payers
as chicago and Northwest, Canadian
racif1c, Northern Pacific and Great
Northern preferred, the whole market
was, for the time being, upset. New
low prices were made all around. This
liquldation continued unchecked for the
nrSt nour and half. Then there came
ietup and fair recovery under short
covering. The industrials were doing
tneir best to break away from the
weakness IN the rails. and in many di-
rectlons were succeeding fairly we'll.
Smash In Rails.
Another tremendous drive at the
railway shares marked the windup
OF the general downward movement.
All through the street the question
was pronounced as to what was the
reai cause or the weakness. In the
Ia1iway group found a general re-
tuctahce 10 express an opinion. One
mouse which has been very bearish
right along said that the rails were
going down because they were a mart
OF the collateral in the loans which
the banks had been calling right and
left. ""o
This view was supported in Soma
other quarters. But the best opinion
was that foreign selling was more
important than anything else. The
enormous premium on the American
ooilar in Europe makes even the
present panic prices of American
railway securities look high in for
eign eyes.
Thls is sufficient explanation for
the Generalization in the railway
market. Nowhere was the view ex-
pressed that the rails were being
SOLO because OF uneasiness over the
new legislation. The uncertainty,
however, regarding the 51k per cent
guarantee clause and whether or NOT
IT would be adequate protection in
the hands of the Interstate Com
merce Commission undoubtedly
operated to deter investors who
otherwise would have been tempt ed
by the sensational decline.
American Linseed.
The American Linseed recapitaliza-
tlon plan, about which there have been
numerous stories recently. has been
completed and an announcement to this
erect may be expected any day now.
There have been two stories about Lin
SEED. one was to the effect that the
company was to split up its profits with
the common stockholders by giving
them, share for share, ~ per cent sec
ond preferred stock. The other story
was to the effect that the common stock
was to get three shares for one and that
the new common. which would be a
no par value stock, would pay SO a share
in dividends
Both of these stories are substan-
TALLY correct. There is to be a 6 per
cent second preferred and the COM
mon is to be split up and three new
shares given for each share of the
issue OF second preferred will not be
given to the common stockholders,
but Will be used to pay for the pur-
chase of competing firm, namely
Lever Bros, which is one Of the
largest soap-making firms in Eng
land, and also there is a Massachu-
sets corporation. The new s per cent
second preferred will not add to the
charges of American Linseed, for the
new company's earnings will take
care of it.
Chandler Motors,
Chandler Motors got down close to its
low Of 121 shortly after the opening.
Then the annual report of the COM
pany was made public. showing the
enormous gain in profits made by the
company last year over the preceding
year, and the stock Immediately re-
fiected these earnings
The report for the year ending De-
cember 81 last showed gross profits
from sales of $6.65O,408, as compared
with $2.905.373 in 1918 and a surplus
after dividend of $4,323,255, compared
with $1,354,618 in the previous wear.
The total surplus is now well above
T,OOO.O0O. Chandler is one of the au-
tomobile companies which look for
1920 to break all records in the auto
mobile industry.
1t was announced today by an Off
cial of the company that the earnings
OF the International Mercantile Ma
rine for 1919 were at least one-third
greater than in 1918 and that the gen
eral outlook for this year is not dis
couraging, even though the freight
market is easier and there is less
traffic moving, which Is largely due
to the exchange situation.