Evening star., 1920-02-17
RECOVERY SETS IN
ON A BUYING WAVE.
BY STUART p. WEST.

day the market continued pretty much
unsettled. The professionals. still IA
vor;ng the short side. were able to
uncover various points of weakness in
individual stocks.
Crucible steel was driven down vio-
lently because of the announcement
made yesterday. but seemingly not
fully appreciated. that there would be
no stock dividend distribution until
the Supreme Court had been heard
from. Republic Steel. anticipating the
annual report. which it was known be-
forehand would be very poor, was an
other object of attack.
While these and a few other stocks
were weak. it was very noticeable
that the general list was not nearly
as sensitive and yielded very reluc-
family. 1t was evident that no i'm
portant selling was in progress and
that, beyond having that second reac-
tion which is characteristic after
the market was not in for any serious
renewal Of the downward movement.
BY midday the signs OF sold-out
condition had become quite plain. The
market had got down pretty close In
many instances to the extreme lows
Of last week, and this, reEardiess OF
any news or developments on the out
side. was the conventional limit Of
rea ction.
A recovery set in. the signal for
which was given by the appearance
of buying of very striking charRc-
ter in various individual stocks:
Among these more particularly were
the oils. Pan American. Mexican Pc
troleum and Texas Company were in
urgent demand. But as these stocks
shot forward the buying spread Into
the lower-priced issues.
Sinclair. Union and Middle States
were all very strong. the first two eS-
pecially. In Steel common and in the
high priced industrial specialties as a
rule the recovery made rapid progress
once it started. A quiet accumulation
was apparent in the railway shares.
General Motors Selling.
The selling which has been going
on In General Motors for the past
several weeks is said in quarters In a
position to know to have been genuine
liquidation. The stock which was be-
ing sold. it was said. had been bought
in the neighborhood Of $50. F2w-
ever, this liquidation rs said to have
about run its course.
During the weakest spells Of the
stock, Wall street was full of rumors
concerning the selling. One story was
to the effect that control was passing,
another was that certain large bank
ing interests had been cunning for
the insiders. charging that they had
been making too much money and
er was that the stock was being sold
to protect other interests. 1t is known
that there has been lot of short SELL
ing of General Motors by certain bear
cliQues, but it can be said that the
stock has not passed out Of strong
hands. If the selling was good" the
buying also was good"
There were rumors today that the
plan of cutting up the pesent stock
and giving ten shares for one might
fall through because 1t did not fur
nish the company with the amount Of
it would. The General Motors Com
pany needs a lot Of fresh money to 60
ahead with its plans for the year and
it is having just as much trouble get
ting it as small companies.
One block Of close to $4,000 shares
OF Baldwin Locomotive was sold dur
ing the last two weeks of which very
little has been said. This block of
stock was owned by one of the in
siders in the company who also has
other large interests, but he had to
let his Baldwin go to protect his
pressure from several sources. This
block of stock was sold partly on the
stock exchange and partly at private
sale. all of the stock passing into
strong hands.
Rails De Better.
Railway shares made. on the whole
satisfactory response to the COM
pletion Of the new bill In the con.
ference committee They were not
but they gave the impression to care
full observers that they were being
picked up quietly on every opportu.
nifty. 1t is increasingly evident that
foreign liquidation offered the whole
explanation for the recent extreme
weakness in the railway group and
that there was absolutely no con-
nection between their decline and the
new legislation. OF course, railway
managers who persist in viewing
it is out Of the question to ever re:
store. professed to be dissatisfied
with the provisions OF the measure.
But those who have made an un-
prejudiced study are more ana more
favorabiy impressed especially with
property valuation. They think that
when the public fully understands
how this guaranty will work out in
numerous Individual cases. particular
ly in the case of some OF the low
nriced issues. 1t will be very pleas
The Mexican oil stocks. Mexican Pc
troleum. Pan American and Pan Amer
lean B, gave good account OF them
selves today and bore out the report
that the buying which came into these
stocks recently has been Of the most
substantial sort. 1t was learned today
that the market just under Pan Amer
leans opening price Of around Is was
simply cluttered up with buying or
ders."
The liquidation in the Mexican
group has been very thorough, with
Mexican Petroleum close to 100 points
of from its high. Pan American down
close to 20 points and Pan American
B about the same. The news which
started the selling in this group was
that the wells had shown a large
amount Of salt water. This was de-
MED from time to time. but 1t did not
stop the selling. Now it is said that
there are several new and favorable
developments. which will be announced
in the near future, which Will have a
decided bearing on the stocks.
The Regional PlaD.
Taking a leaf out Of the federal
were split up into regional systems,
cided on this scheme. These two roads
are the Pennsylvania and Erie. The
former was the first to decide to split
their lines up and run them from sew
eral headquarters.
The Erie goes little farther than
the Pennsylvania, as II will have four
branches north. east. south and west
1t Ia said that the Erie can carry
freight cheaper than any of the other
roads and it hopes by the regional
plan to get moro out of this than 1t
did before the government took over
the control of the roads.