Evening star., 1920-12-01
STOCKS DECLINE ON
HEAVY RAIL SALES
Brotherhood Alleged Plans
Act as Red Flag in Aid
ing Bear Traders.
BY STUART p. WEST.

NEW YORK, December l Especially. J.
1t was the extreme weakness OF the
railway shares which upset the mar
ket today and caused a renewal of
selling pressure all along the line.
From the standpoint of Pennsylvania
railroad it may have been good policy
to issue the warning it did this morn
ing regarding the alleged plot of or
ganized labor to dominate and even
tually nationalize the railroads of the
country through the formation Of one
gigantic union. But there could be
no doubt that a statement SO sensa-
tiOnal came at most unfortunate
time from the standpoint of the in
vestment community. The markets
had just seemed to be getting onto
their feet.
AS a matter of fact. the pressure
against the rails had started yeSter-
day and it might have kept on today
in any event. But the Pennsylvania
statement gave The b ars the orror-
tunity they were looking for to bring
out real stock; of this there was no
doubt.
Position Unfavorable.
The technical position of the rail-
way shares. especially the low-priced
rails. has long been known to be
weak. This is because almost every
houS" in Wall street has been bulljng
these stocks and .conSi silently advis-
ing their purchase ever since the new
ra schedules were announced, over
thr"H months ago.
The public, responding to this ad-
vice, bough: heavily into the junior
rails in September and October, and
this big long interest was only par
italy closed out during the smash
in the market in the first three weeks
in November
was supplementary liquidation. elimi-
mating good part of the remaining
long account and making the railway
market do what the Industrial market
had done fortnight ago.
Disappointment over October net
results has been a factor, and there
has already been some selling from
abroad. although this has not been
heavy.
Then, too, the earning figures have
fallen far short of the glowing esti-
mates on which the low-priced specu-
lative rails were bought in the early
autumn.
The selling which carried New
Haven into new low territory today
is reported to have been for the ac-
count of a couple of large estates
which are said to have come to the
conclusion that the stock is too spec
ulative to hold further and that, q
switch into some other issue should
be made. Apropos of the explanation
iOi tft LA III "iiISft TIC ASO"
railroads find themselves now, it has
been said that the relief suggested
that is, that the trunk lines and the
central western roads give up little
n.ore to the New Haven-might not
come at once, but that unless 1t was
voluntarily agreed to by the two
classes of roads in question the In
terstate Commerce Commission would
force the action.
Foreign Operations.
Considerable interest was taken in
the resumption of arbitrage dealings
with Europe for the first time since
the outbreak of the war. From all
accounts, however. very little busi-
ness of the sort was done and what
there was of 1t had slittle influence
on the market of the day. Both
London and Amsterdam bought their
two petroleum specialties, Royal
Dutch and Shell Transport. There
was some talk of foreign selling in
connection with the weakness in the
rails, but houses which would natur-
ally handle such orders were inclined
to belittle their importance. The
London market is still on a cash
basis and this fact in itself would
prevent arbitrage trading from as
suming the character it had prior to
August, 1914. This. with other re-
strictions, 1t was felt. would make
the development of today's transac-
tions with London and Amsterdam
extremely gradual.