New-York tribune., 1920-06-09
Stock Market Is
Quiet; Trend of
Prices Irregular
Reduction in Chicago &
North Western Railroad
Dividends Disturbing;
Call Money at 10 Per Cent

1t was another extremely dull ses-
sion in the stock market yesterday.
The Stret was just as much in the dark
as ever as to the outcome of the Re-
publican convention, although the fell
( ing appeared to be gaining ground that
a candidate wholly satisfactory to the
financial community would be nomi-
mated ct Chicago before the end of the
week.
The stock market had other things
ito contend with, chiefly the disturbing
Influence of a reduction in the pre-
! ferred and comon stock dividends of
the Chicago & Northwestern Railway.
which was by far the outstanding de-
velopment of the day, and another rise
in call money rates which got up to 10
per cent in the afternoon. Stocks dis
played fair measure of firmness in
the early hours of trading. but su-
cumbed in the afternoon to increased
selling pressure. In the noon hour not
hands and for the full five hours the
turnover was only approximately 40O,-
600 shares.
Action of the Chicago & Northwest
ern directors in cutting the dvedends,
the preferred disbursements from s to
7 per cent and the common from 7 to
per cent, came as surprise, although
the jnior issue had shown weakness in
advance of the official announcement of
the reduction. On the day the pre-
ferred lost 10 points net and the COM
mon SIS points. The Street argued
that when a road with the dividend
record of the NorthwesternAit had
been paying 8 per cent on the pre-
common since 19O2-had been forced
to make reduction similar action
might be expected in the case of other
roads whose position is not 80 strong.
This naturally had the effect of caus-
ing selling in other dividend paying
rails which yielded in the course of
the afternoon, shares of certain of the
roads in the Northwest showing spe-
cial weakness. The explanation given
by the directors of the Chicago &
Northwestern is that the uncertainty
of the present railroad situation had
made such a course advisable, particu-
larly in view of the fact that the
guarantees afforded the railroads by
tation law bearing upon revenues had
not yet put the company in sufficient
funds to take care of the cash divi-
dends at the old rates.
The general market was a very thin
affair. Reading stock moved up
sharply on active buying attributed to
the decision of the Supreme Court
denying a rehearing, which means that
the decree ordering segregation Of
the coal properties will stand. Bald
win LOGON otive, Republic Steel Inter
national Paper, and Studebaker. were
among the weakest industrials on the
early afternoon setback, but most Of
them rallied at the close. Baldwin Lo-
comotive came back with quite dis
play of strength and closed fraction
ally up. international Harvester stood
out as strong spot on reports of an
impending increase in the dividend.
In the oil group. Royal Dutch was a
leader.
The market ran into tight money
was a repetition of, the performance
of the preceding day. Call loans re-
newed at per cent, but on the after
noon rise the rate got up to 10 per
cent. In the final hour it dropped
back to close at 8. In the investment
market the outstanding feature was
the quick absorption Of the $l5,0O0,-
600 of new Southern Pacific equipment
trust certificates. In foreign exchange
the movement of rates was sharply
against the Far East as result of
further, demoralizing decline in the
price of silver. The break in London
silver quotations yesterday was 6
pence. Translated into cents in this
market it meant reduction Of 10
cents in the price here, which brought
silver down to Sd cents an ounce.
The June crop report issued by
the Department of Agriculture did not
make its appearance until after the
close of the stock market. The bulletin
shows that there was some improve
ment in May in the winter wheat
promise. with an indicated yield of
504 100000 bushels compared with
4S4 ,647 900 month ago. Even so, the
showing compared with the final yield
of 731 ,636,000 bushels in 1919, is far
from satisfactory. There will be
larger crop of spring wheat than last
year according to the latest report,
which indicates harvest of 277,0oO,-
600 bushels against 1851 900 in 1919.
II