The Richmond Virginian. (Richmond, Va.) 1910-1920, 1920-03-08
LOOK FOR INDUSTRIAL
Combinations SOON
BIZ BRoADAN WALL

New York March Return of the
railroads to private ownership, con-
flrTnation by the supreme court of the
legality of the United States Steel cor
porafien and announcement that gold
imports will soon begin, have in the
past week put the market few
points higher. But the advance that
has taken place can be fully account
ed for by the covering &C professional
short contracts. The borrowings of
stocks prove that there Is a very
large short interest still outstanding.
As 1t apparently cannot be forced to
cover brokers conclude that 1t must
be for the account of persons who
have the securities In the boxes OF
who have adopted this method of
lending money at the call rate. Test
of the market will come when the
wires from the West are opened Mon
day or Tuesday.
The storm that has Just swept
over the country will mean smaller
railroad earnings for the first quarter
but ii makes the crop outlook more
favorable.
Return OF the rails has been particr
uiarly disa ppoint.ng because al! spec
ulative Wall Street was set for big
advance In those issues selling at
a small number of dollars per share
i
priced" stocks. but they are not
low in comparison with the values of
the properties they represent These
so-caiIed low priced railroads are the
poor relations that have never pros
pered There is no reason for expect
ing them to do better in the future.
Now that the L. s. steel corpora
ton legality cannot Ire questioned
the way is opened for a reasonable
system of corporation management.
The greatest industrial development
in the history Of the world took place
In the United States in the period
when the so-called trusts were being
organized. Most of them have proved
honest. Things must be done on such
big scale nowadays that vast COM
binations of capital must be permitted
1t will be natural to see the organi-
cation of very large new corporations
in the next few years Because OF that
Industrial stocks are TO be the specuia-
tive and investment favorites Of the
next decade. Because the big cor
porations were forever fighting in the
courts for their lives they have not
had a chance to develop. Now they
will. The resources sof America are
barely scratched and the next decade
will see amazing things in this coun-
try. Wall street Will renect tnem-
Although great railroad and indus
trial combinations are sure to make
their appearance in net the distant
future, the immediate future is still
much clouded. Apparently the turn
is at hand in the price of commodi-
ties. Here and there prices are adj
1aneing. but the whole structure rs
getting ready for collapse. Grain men
expect that az soon as the government
guarantee of wheat prices expires the
price of wheat will decline to about
s125 g. bushel. There will be tens
Of thousands OF men now employed
at good salaries looking for jobs by
midsummer. BY that time prices of
food will have been reduced so that
they can afford to take smaller wages
in order to get work at all
Gold imports will tend to reduce
corporation earnings in the United
States, but will ultimately be oullish
on the stock market They will re-
iuce corporation earnings at first by
causing a still further decline in
American exports because England
will naturally discourage purchases
In America while she is building up a
credit here. At the same time the
federal reserve board will not permit
an expansion OF the currency with
this gold.