Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-10-06
WEAK SPOTS FOUND
IN RAILROAD LIST
BY sTuART E. WEST.

NEW YORK, October 6 Especially -
There were no new considerations
facing Wall street as business be-
gan today. 1t was still mainly 4 dues-
ton of the inside position Of the mar
ket. whether the short covering of
the previous days had gone far
enough to relieve the overcrowded
condition of the bear account and
whether the profit-taking induced by
the rapid upturn of the previous days
would be continued
AS 1T turned out the reaction in the
railway shares was resumed and made
somewhat greater progress than it
mad yesterday, while, on the other
hand, the Industrial section was ex-
tremely irregular. with a downward
tendency predomrlating in stocks
which the shorts had been buying on
other days and an upward tendency
in stocks in which the short interest
had not been SO much reduced.
The recession in the railway division
after practically a month of continu-
GUS advance in which attractive prof
its had accumulated in speculative
hands.
Movement Moderate.
circumstances that a decline should
have occurred, but rather the sur
prising thing was that the downward
movement was so moderate.
A pretty severe extra trial was i'm
posed upon sentiment toward the
rails by the heavy break in Texas
ana Pacific following the similar drop
yesterday in the Missouri, Kansas
and Texas shares. The street had
apparently forgotten that Texas and
Pacific is still in the hands of the
receiver and that as such its share
owners are facing reorganization. in
which they might be assessed.
IT was the sudden realization of
this possibility which was responsible
FOR the outpour of Texas and Pacific
STOCK and an eight-point drop today.
That it did not drag the rest of the
rails down more was tribute to
the soi1dlty OF the main position in
this quarter of the market.
Look for Week.-Mrs.,
The break in Missouri, Kansas and
Texas and Texas and Pacific, due to
he fear of an assessment, started a
search for other stocks in the same
predicament. This was the explana-
ton for the break in Chicago and
Eastern Illinois. The tentative plan
OF reorganization for this company calls
or an assessment of $50 a share on botf,
classes of stock
This heavy burden was belittled or
passed over in the campaign of bull
ish literature which was made the
| OASIS for the recent sharp advance III
Chicago and Eastern Illinois shares
Emphasis was laid in this literature
upon the small capital account of the
| road as contributing toward extra
ordinary results under the new rate
schedules, and a number of unwary
f.r
parently ignorant of the RESPONSE
niHty which they had to face as par
Elephants In drastic reorganization.
Leaders Act Well.
Advantage seemed to be taken of the
unsettiencnt In the junior rails to In
crease holdings Of the standard dividend
payers. The group stood their ground
uncommoniy well. Northern Pacific al
one tirne got back to its previous high
Norfolk and Western made a new high
while Reading, which always does the
unexpected and has never been as
strong as it WAS entitled to be while
the general market was on the upward
move, emerged from the unsettlement in
the rest of the list and shot forward
to the highest price of the year.
In the early part of the session fur
Their short covering made itself felt
N the sugar stocks. In American In
ternational and in one or two OF the
others. There was active demand for
American Smelling. which helped the
rest of the metal group.
On the other hand, in the equip
ments, the steels and the oils the
short interest had apparently been
sufficiently reduced for them to be
once more susceptible to the reac-
tionary drift In other quarters.
Baldwin Locomotive, Republic Steel
sethlehem B and the Mexican oils ali
came of rather sharply In the after
noon.
Call money went up to per cent
again.