Evening star., 1920-07-12
CONDITIONS FAVOR
BUYING OF RAILS
BY STUART p. WEST.

BY STUART p. WEST.
NEW YORK, July 12.-Today's mar
ket was curious mixture of heavi-
ness and even weakness in the indus
trial list. combined with aggressive
buying in the rails, especially the
low-priced rail stocks: These new de-
velopments may, of course. have cas-
lily been related to one another. 1t
has been the custom all through the
recent advance for the active trading
element to speedily desert stocks
which have ceased to move and jump
into new favorites as these have come
to the front. Quite likely the shift of
interest into the railway shares today
represented largely the employment
in the rails of speculative profits TAX
en- from the industrials.
But at the same time there were
other causes at work favoring the
railway list at the expense of the
Industrial section.
tation that the Interstate Commerce
Comission would hand down it's de-
cision in the rate case in the very
near future and very likely before
the present week was out.
Confidence that the verdict would
further by the over-Sunday report
from Washington that not only would
the increase cover what is required
under the transportation act-namely
per cent return on property value
but that passenger rates would be
put up enough to also make good the
impending extra wage increase.
While this additional incentive was
being given the buying of the rails
the industrials were rendered at least
temporarily less popular by the new
evidence coming to hand of the seri-
effect
operations in the various industrial
lines.
At first it had been thought that
American Woolen Company had shut
down it's New England mills because
of an insufficiency of business, but
when it was discovered that it was
the transportation difficulties that
were chiefly responsible it set a good
many to thinking about the probabil-
ity Of the other industries beside the
textile trade being similarly affected
1naSmuch as the steel trade jour-
nails and all other reports from the
steel centers have particularly COM
planned about the seriousness Of the
car shortage, the discussion of a pos
sible close down of steel plants was
natural enough.
1t was the weakness in the steels
which carried with them other of the
recent leaders.
Steel Shares Weak.
All the steel stocks were very
noticeably sluggish in Saturdays
market. They all opened down this
morning and were very persistently
sold, even while other stocks We're
being pushed up.
1t was SO plain that the weakness
in steels was out of proportion to
the unsettlement in the rest of the
industrials that special explana-
tion seemed to be called for.
The most plausible reason was
found in the latest advices from the
steel industry, beginning with last
Wednesdays review by the iron trade
journals and continuing through the
over-Sunday dispatches from Pitts
burgh and other centers. all of them
streSsing the transportation diff
culties as being quite as acute as they
have been at any time. The result of the
inability to get cars is that an un-
comfortable surplus is piling up at
the manufacturing points. and the
intimation is that if this situation is
not very soon relieved the steel mills
will have to shut down.
American Woolen was under pres
sure again today, getting down below
81. In addition to the heavy short
selling of Wool common there is also
reported to have been considerable
liquidation. The fact that the under
writing syndicate did not dispose of
ing down of soms of the mills. was
considered a very bearish tip on the
stock, and the bear party proceeded
to take every advantage of it. In some
quarters 1t was said that the stock
was getting around a price where it
was due for a technical rally. and that
this would be very sharp if the pool
was still in a position to run in the
shorts.
Invincible Oil.
Invincible Oil had quite a bulge at
the opening due to the report before
the opening of the stock market that
well had been brought IN in the
new Arkansas field, where Invincible,
through a subsidiary, is half owner
with Standard Oil of Louisiana. The
Mexican oil group, made up of Mexi-
can Petroleum and the Pen-American,
were heavy with the rest of the mar
ket- Mexican Petroleum is ,favorite
with the bear party, as it is possible
to spread rumors of salt water in
da at almost any time.
The Bond Market.
There was very little feature in to-
days bond market. While trading
continued fairly active, price changes
were few and unimportant Railway
issues maintained the better tone OBJ
servable at the close of last week, but
they gained less than might have been
expected in view of the strength of
the railway share list. Atchison gen
eral as got up to 721s. which was a
fraction higher than the best Of last
week and over points above the low
OF a month ago. This was fairly
typical Of the higher grade railway
bonds. This group is up a point and
half to 2 points on the average
from the extreme low figure, but it
seems unlikely that there can be a
much. further gain until there is a
radical change in money rates.
Liberty bonds were about station
ary. despite the encouraging an
nouncement over Sunday that the war
debt of the country had been reduced
over $2,000,000,000 since the first of
last August. Belgian 71ss made a new
III irh ut