Evening star., 1920-02-20
'|NDUSTR|ALSLEAD
MARKET ADVANCE
By STU ART r. WEST.
t'orraSnondnut of Thu Sfar -


airy 20.-Today saw the completion of
the discontinue of the bear party in
the stock market.
Yesterday short sellers had been
deferred from covering because it
seemed to them the industrials were
reluctant to respond to the upward
whrl in the rails. But this morn
ing the scene was abruptly shifted.
Railway shares opened with consid-
cradle irregularity. and. Influenced to
some extent by the discussion Of the
opposition that was forming to the
railway bill. heavy profit-taking set
in, which made itself felt in keeping
the rails down for the first hour or
So But just as soon as the railway
stocks began to lag the oils started
up.
1t was evident that speculative
profits so easily and quickly made
yesterday afternoon in the rails were
being transferred to the industriafs.
In these the heavy short interest was
still outstanding and. once IT was seen
that the sluggishness of yesterday In
the industrial quarter had been only
apparent and not real. covering pur-
chases became urgent all around.
Oils, Motors and SteeIs Feature.
Mexica petroleum and Pan-Amer-
lean We're the leaders of the OILS
Their violent advance. which was Il
proof of the powerful accumulat ton
that has been going on while the
public has been grossly deceived ny
the panic talk in high quarters. threw
CONSERVATION into the ranks OF specu-
lators for the decline. There fo!-
lowed "a quick bidding up OF one
group after another.
n ha nj
then the steels, then the metal shares.
1t may have been true that the hlgh
prices in all these groups were
reached as the result of short cover
ing. But the essential fact was that
basis had been laid for the covering
movement in the improvement which
has taken place in the market position
as the result of the drastic liquidation
which was completed week ago
Bear Party Discomhted.
The bear crowd within the last few
days have been very badly beaten.
They have had to give up good
share of the profits gathered during
the previous months break. To be
sure. they did good deal of covering
a week ago, when stocks were around
the low. but on the first little rally
these shorts were put out again. and
the consequence was that the short in
terest was very little reduced. On the
contrary. the indications are that the
bears continued to fight the rise all
the way up. and that the outstanding
volume of short contracts as it stood
in the early part of this week was
actually greater than ever
Nearly every house in the street
which sends out daily market letters
was talking on Monday and Tuesday
about the impossibilty of there being
any sustained advance with credit so
strained as il was and were urging
fh1ir al liau uf.,Ja all
OF course. this advice is compare
lively safe where it is not specified
what rally consists in. But. even
so. those who followed these bearish
expressions did go short as a matter
of fact and have had to cover at
heavy loss.
The bear crowd deprecated the rise
in the rails. inssmuch as it irterfered
with their position. They rejoiced be-
cause yesterday the violent advance
in the railway group brought so lit
tie response in the industrial quarter.
Pere Marquette.
The following resume of the sit
uation in Pere Marquette was sent out
by one of the big wire houses: Pere
as reorganized property with in
terest charges scaled down about 60
per cent to a nominal S11.6S1 900 un-
der conditions prevailing before in
fation set in, thus placing the stock
in an enviable position to benefit by
future expansion.
This is one of the few companies
which earned more than its standard
return guaranteed by the government.
which was placed at s3.74s.0OO year.
the average for three years including
two and one-half years in the hands
of receivers.
It's traffic showed. up well in 1919.
net being $3.50. 900. an increase of
$685.. 900. which, after interest.
.qualed about Sls per cent on the
common stock. which is $4,000. 900.
Prior preferred Of s12.42s.0oO and sec
ond preferred of s12.O00.OoO call for
only $l.1SO,00O annual dividends. so
the amount earned on the common
without allowing for special appro.
priations would be $3.S0O.0OO.
the road which taps the most i'm
portant automobile centers and has
large local traffic which constitutes
S5 per cent of it's business
American Locomotive.
With the turn for the better in the
railway shares. there was notice
able shifting of opinion in regard
to the equipment concerns which are
certainly bound to benefit from any
prosperity which might come to the
rails. All of the rails need new equip
ment and II is said in responsible
quarters that when the orders are
placed they will be in enormous fs.
ures.
Along this line it was announced
today that the American Locomotive
Company has already begun to re-
ceive orders from domestic sources.
The Louisville and Nashville has
placed an order for engines with the
company. which has also booked sew
eral other large orders. The Mon
treal plant of the company has just
received an order from the Canadian
National railway.