Evening star., 1920-02-18
RA|LSLEADERS|N
ACTIVE MARKET
BY STUART p. WEST.

| special correspondent OF 1ne Stdr.
WALL STREET. N Y. February IS
The attitude of skepticism ed
! in some of the market comment re-
garding yesterdays demonstration in
by what happened today. This ad-
vance was not mere short cover
ing movement
| II was due to growing aPprecia-
| tion Of the advantages of the new
railway bill. especially as regards
the provision nullifying the Sherman
law and permitting subject to ap-
| proyal by the Interstate Commerce
Commission speculations ffteen ana
! twenty years ago.
! There have been many in the hnan l.
! cial community who have seen the
possibilities of the new legislation Tor
/, a long time past and have been quiet
! ly picking up the railway stocks.
| But this accumulation did not
! previous to yesterday have chance
! TO show itself, frst because OF the
denression in the general market,
| which involved tie liquidation OF ran
way stocks held as collateral in bank
loans and partly because OF Europe
| heavy selling on the exchange con-
ditions.
| Turn for the Better.
but with the turn for the better in
the general list and the cessation OF the
pressure from abroad. it was suddenly
discovered that the railway shares mad
become scarce around recently prevail
ing prices.
When traders started bidding for
these stocks yesterday afternoon they
went up very quickly. But at once out
side buying came in and continued this
morning. because. while the railway
shares were up considerably from their
low. they were still. regarded as at
tractive by comparison with old line
standards.
BuOyaacy I'm Rails.
The great buoyancy in the rails had
the effect of alarming the heavy short
interest in other sections of the mar
ket, and, despite the widely proclaim
ed opinion that conditions'did not JUS
tify any attempt at a bull speculation
or any sustained advance. the indus
trial leaders were bid up with con-
siderable violence.
To be sure their rise was chiefly the
work of an overcrowded short in
terest, but it also illustrated the i'm
proved condition of the market and
the fact that the floating supply OF
stocks had been heavily reduced by
been deferred by all the pessimism and
panic talk emanating from banking cir
cles.
Once more there was occasion to
observe that of all the Improbable
things to do in Wall street, to follow
SO called banking opinion is one OF
the most Improbable.
Great Northern and Northern Pacific.
The story of a projected revival Of
the old Northern Securities alliance
was not everywhere accredited. sun
it was believed by the majority. Much
interest was taken accordingly in the
value Of the Burlington equity. which
in past years has been such fruit
full subject of speculation. Very often
lin the past bull campaigns have been
paid in the Hill stocks on the possi-
biity of just such melon cutting.
Now the value of this melon becomes
once again a proper subject Of dis
CHlssion.
Burlington stock was taken over
Jointly by Great Northern and North =
ern Pacific on the basis Of 5000 share
and 4 per cent joint collateral Donds
issued against it. Burlington paid
dividends right along of per cent.
which was sufficient to cover the bond
interest and lay by during the years
Of plenty handsome surplus. In a
combination such as is proposed,
which would involve the retirement or
the refunding of the collateral bonds.
this surplus would be released for the
joint benefit of Great Northern and
Northern Pacific share owners.
Other Rail Combinations.
Besides the combination of Hill
roads there are variety OF other al
liances which. under the permissive
clause in the new railway bill. have
come in for attention. One of these
Is the old projected union of Chicago
and Northwestern with Union and
Southern Pacific. Another is the old
Pacific. Denver and Rio Grande and
Western Pacific. The last named has
been noticeably strong all through the
recent depression and today 1t came
to the front as one of the leaders Of
the low-priced rails.
New Line Of Goods.
There was a noticeable change in
sentiment in the brokerage advices
sent out before the opening today.
While none of these letters urged GUS
toners to load up with stocks at these
levels, all took the view that the
change for better in the rails had
helped sentiment. One OF the houses
which has been urging the sale OF
stocks for the past several weeks.
sales today, said that caution should
be used in purchases.
However, from a close reading of
the letters sent out by at least ten
of the larger brokerage houses the
conclusion is reached that II 10 still
a two-sided market. with the bulls
and bears fighting for the upper hand.
In all of the letters. however, 1t was
said that the powers that be would
not allow q runaway market.
Rail Earnings.
earnings under the plan in the Cum
| mins-Esch bill was sent out by one
Of the big brokerage houses today
| new deal means $25 per share earn
| ings for Lackawanna. $3.50 for Ches-
apeake and Ohio, So for Atchison. 50
! for Rock Island. SIS for Louisville and
Nashville. 50 for Missouri, Kansas and
| Texas; $6 for Pere Marquette, SO for
| New York Central. So for Chicago,
Milwaukee and St Paul; 81 for Mis-
souri, Pacific, $40 for Norfolk and
Western. $12 for Reading, Southern
| Pacific and Union Pacific.
High Prices of Day.
Between l and o'clock the high
/ prices of the day thus far were made
| in the Industrial list.
| Crucible Steel with a net gain OF
| nearly nine points was the leader
! Steel got as high at 9s%.
| Another outstanding feature was
General Motors, which showed a gain
! of more than eight points.
| Demand sterling was higher. selling
! at 337 for cables or cents above yes