The Washington herald., 1920-08-03
STOCK MARKET
BREAKS BADLY
List Falls Off After First
Few Minutes of
Trading.
RAILS ALSO YIELD
Issues Close Very Weak and
Active at Days Low
Prices.

SAw York, Aug. 2. - The whole
market broke badly today after
shArp rally in the first few minutes
Of trading. Railroad stocks opened
an average Of points higher. IN
dustrials were laggards from tns
start and were Immediately SOLO
freely under cover OF the strength
OF the rails Within half an hour
after the opening the rails also were
Welding. Before the day was ended
the rails had lost practically an
their gains and some showed net
losses while the industrtals were
down from a couple OF points 10
and more The closing was very
weak and active at about the low
price of the day.
Money was renewed at per cent
and closed at 7. The government
cotton report Of TAI per cent was
more buIlish than the Street ex-
pected and the option market sd-
vanced, although the best authorl-
ties urgently ADVISED liauidatioh
The first serious break OF the day
came in Vanadium Steel. II declined
81 points without a reaction There
was a quick recovery Of half the
loss. but afterward the stock sold
CO~n again nearly u OOAAOAA- AS
selling was supposed to be liauida-
tion induced by the report publish
ed last week. showing the dividend
barely earned. Replogle Steel, the
other company controlled by j.
Leanord Reploysle, had just such a
break about q week ago, and for
that reason the Street looked upos
the Vanadium break today as en-
tirely manipulated. The general pub
lie did not seem to regard II so,
and selling Of all kinds of indus
trials Immediately became insistent
Replogle declined points, Strom-
berg ., and Bosch Magnetic more
than s. United States Steel, Crucible
Corn Products, Baldwin and Mexican
Petroleum were most severely
shaken.
Mexican Petrolenm.
Mexican Petroleum is putting
down seven new wells, four OF
which should be brought in within
she next sixty days. The recent
heavy rains in Mexico delayed work
for two weeks, which accounts for
the failure to bring in the well that
was expected about ten days ago.
The gas pressure in those of the
wells that are nearing the oil is
such as to Justify expectations of
Eushers. But today's market was
not concerned with intrinsic value
and therefore Mexican Petroleum
broke more than 9 points, while
Pan American, which controls it
declined points from the high
price Of the morning. other oil
stocks did correspondingly bad, al
though the petroleum shares as a
class are stronger intrinsically than
any other on the board.
Rails
Failure Of the railroads to show
permanent Improvement as a result
OF the rate increase was due to
three distinct reasons. In the first
place, most of the railroad secur-
ties Of the country are owned by
persons who have paid for them and
are in the class known as the
public Speculative Wall Street
had large quantities. which were
promptly cashed in today on the
good news The really big people
know that the rate decision is going
TO be ultimately bullish, but thew
nave not had any stocks and would
like to pick them up at lower levels.
therefore when the professionals
sold no support was found. The
second reason for the decline was
the impossibility of getting, specu-
lstiye money with which TO buv
the rails. The third reason was the
fact that labor conditions and
freight congestion are such that the
railroads cannot Immediately re-
store their properties to a condition
of complete efficiency. The freight
congestion ties up credit that the
railroads need and the labor condi-
ton will make IT dificult to get the
physical work done even after the
Improvement plans are financed.
In 1915 the railroads got an in
crease OF Is per cent in rates. When
the government took over the roads
there was an increase of 25 per
cent The 40 per cent now granted
TO Eastern roads makes a total in
crease Of 101 Ia per cent since the
war began In addition to that,
passenger rates were increased from
z cents to cents, and now a fur
ther increase Of 20 per cent, max
ing them 3.6 per cent, on top OF
which persons who ride in Pull
man cars must pay an additional
80 per cent or 5.4 cents per mile.
try has increased materially since
this series OF rate advance began.
Therefore, even assuming that the
employees do take $4,000, ,ooo, 900
more yearly, there will be enough
in the next year to enable all we'll
managed railroads to be completely
rehabiIitated and become once more
the backbone of the country. 1t
looks hike a new era for industry
with sfhcient railroads properly
financed and well managed.
American International stock
broke points to the new low rec
ord Of t.
Railroad equipment stocks have
been heavily bought by spectators
FOR many months in anticipation of
the Interstate Commerce Commits
sion announcement Very natural
>lys therefore. thousands Of shares
were for sale on the good news
and the selling of the stock broke
all the equipments. They declined
fully as much as the industrials.