Evening star., 1920-04-07
INDUSTR|A[SLEAD
BIG BULL MARKET
BY STUART r. WEST.

WALL STREET. ". Y. April t.
The upward movement had gained
sufficient nome ntum in the course OF
yesterdays trading to have kept on
vigorously today whether or not there
had been any new stimulus to apply
to il.
But as il happened the action OF the
Studebaker directors declaring Q 33ia
per cent stock dividend which wen.
far beyond calculations. furnished a
fresh incentive of a very powerful
sort.
1t drew attention again to the su-
preme part which the distribution o.
past profits accumulated in the treas
uries of the industrial compa MES o.
the capitalization Of increased earn
ing capacity, as the case may be. is
playing in the present market situation.
Where insiders know what they
have to distribute. know when IL rs
going to be distributed and know pre-
cisely how much this will make their
present stocks worth. it is quite ap-
parent that every other matter bear
ing upon the movement of prices is
of very inferior significance.
Analysis vindicatea.
The position which those optimis-
tically inclined have taken all along
in the face of much opposition and in
face of outspoken pessimism in high
financial places is that the distribu-
ton of accumulated war profits was
the supreme ia ctor in determining the
ultimate selling prices of stocks; that.
while credit difficulties might stand
in the way temporarily. they could
not prevail in the end and that the
main drift of things in the market
would not change until this prom
di Stributing program had been pu'
through. This analysis has now been
completely vindicated. Todayit Nigh
H., 1.
would have been taken of the an
nouncement that gold shipments TO
South America had been resumed and
that $1o,000,000 would go out at the
close of the week.
An Unpleasant Introduction.
This had not been expected and in
troduced something that was not a
all pleasing into an otherwise very
cheerful outlook. The fact that the
enthused as il was over the Stude-
baker action, was another convincing
test of the relative Importance Of the
stock dividend actuahties and posi-
biiities on the one hand and the
money market situation on the other.
Studebaker shot up nearly fifteen
points, the greater part of the gain
occurring right at the opening. This
was a measure Of the extent to which
the Studebaker directors had taken
the market by surprise.
Along with the Studebaker move
went a revival of an enthusiastic de-
nahd for everything on the list that
las been mentioned in the gossip of
the past few months as being in a posi-
tion to cut a melon. Among these
me- particularly were American
Wool. Baldwin Locomotive. Republic
Steel. May Department Stores. Ameri-
can Linseed, and last, but not least,
Steel common.
Expect Declarations.
In all these stocks the distribution
of an extra dividend, either in stock
or in cash. is regarded as reasonably
certain. American Linseed directors
were expected to make some an
nouncement today regarding their
plan for readjusting the capital ac-
count, which involves the exchange
of three shares of new stock for one
Of old but they adjourned Tor lack
of quorum.
A sensational jump in Vanadiuin
Steel was connected with Wall
street story that the difference which
has been SO much aired in connec-
ton with the StutZ Motor corner has
been settled. A number of specula-
tors had gone short of Vanadium and
also of Stromberg on the idea that
the Stutz mess would react unfavor-
ably upon all the properties in which
the Ryan interest is dominant. The
rise in Stromberg was fairly sensa-
tional. and it looked as III the short IN
terest in this stock was thoroughly
intimidated. remembering what hap
pened to the bears in Stutz.