Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-08-16
OIL COMPANIES STRUGGLE.
IS DANGEROUS TO MARKET
Accommodating Surplus Of Petroleum
Must Soon Force Reduction In
Price to Consumer.
OIL BOOM is NOW OVER
Higher Level OF Prices on Wall
Street Being Sought by Bankers
and Professional Traders I'm Self.
Defense.
ny BRoADAN WALL.

NEW YORK, August l5.-Profes-
sional traders and banking interests
have been working together the last
rev days In an effort to secure a higher
level or prices. The professionals
want this higher level as Il basis for
further short sales. The bankers
want stocks higher so that they may,
get better prices for the lame ducks
they are carryinS-cdrryin in nocks.
Not In twenty years have so many
business concerns been absolutely at
the mercy Of their bankers az now
This combined effort has succeeded TO
such an extent that the banking in
terests will be able to sell out at q
profit the stocks they took about a
week ago TO prevent what was rapid
~ developing into a panic. The bad
bank statement may cause some pre-
cipitation in tho selling.
II IL significant also that money
rates have been easier ever since the
Comptroller OF the Treasury put sc,
Of awkward questions TO the bankers
OF New York
Further slump Possible.
1t Is entirely possible that there
may be "A SIN further slump in the
market, but there are stocks selling
for less than the value OF their quick
assets. One oil stock sold the other
day at less than the amount OF money
it's officers say II will earn for 1920
after paying taxes. There are several
selling Tor only double their 1920
gross earnings. Numerous ones can
be bought for the price Of their war
earnings. the properties they had be-
fore the war being thrown in for
good measure. This Is true of the in
dustrials.
Among the railroads an equally
grotcsQuc situation prevails. Now
that the Interstate Commerce Com
mission Is commanded by law to make
rates that viii enable the railroads TO
earn fair return on the value OF
their propcrt!cs-not on the cost, but
on the va!ue-!t Is proba BILE that there
is not railroad in America that Will
deiault And in the face OF tina, fact
bonds OF the PennsylHan Railroad
company can be bought on about a
per cent investment basis, while
Aecond-gradc railroad bonds can he
nad az from IS TO 10 per cent invest
ment yield.
Can Make No Prediction.
In view OF the vastnesa OF thcse in
aucnces in the grip OF which the
STOCK market finds itself any one
would be foolish to proclaim that
stocks positively Will 20 higher or
VII! 20 lower in the near future. But
thunderstorms always have stopped
and this one certainty Will and f, ~
easy to see the substantial values
through a
flashes OF politics. \ great many very
important people lIquida,cd months
ago and among these may be usthd
the leading bankers Of the country.
They knew what was coming and
no" they are struggling to replace
their Investments
Another struggle liz that between
me petroleum companies and the oil
stock companies. Some OF the latter
nave turned up with valuable assets
but shy OF wall Street margins. The
result has been really good buying
OF these ny-by-night stocks because
AFTER their shake down they represent
rich prizes for the petroleum comma
Mes. There is good evidence that in
the last week one OF the greatest ne
'roitum companies picked up 100. 600
shares Of an oil stock company's
stock. thereby getting a dominating
influence on 1t at price one-slxth at
which 1t cost the sucker public.
Dangerous for Public.
This struggle among the oil compa-
MES la made all the more DANGEROUS
for the public by the fact that the
surplus OF petroleum is accumuIat
Ing that must soon force n reduction
OF prices to actual consumers. This
'act has been published only in this
column and has been denied every
where else. Now the warning is given
here that the oil boom is over and
that surplus Of petroleum is ac-
cumulatinE.
This means better prices for real
oil stocks and n more healthy devcl-
opment o. the petroleum business. but
1t also means that the time for fool
inf; with oil stock companies is past