The Richmond Virginian. (Richmond, Va.) 1910-1920, 1920-02-23
REASONS VllCED
f0A SELLING STOCKS
by HRoADAN WALL.

| New York. Feb. 22.-Transactiori,
in Wall Street the past week hav,
been almost entirely professional and
the buying has been chiefly the cover
| ing Of short contracts. This has beer
particularly true in the railroad list
shart contracts have been outstand-
ing for many professionals for al
much as two years in the rails. Many
OF these contracts were put out chleny
to get the interest that brokers al.
low customers under such circum-
stances. The high rates prevailing
have made IL very profitable trans
action even where prices have not
declined much. Most of the cover
ing is being done at a profit even
though quotations have advanced
during the operation
Shorts have also covered freely in
the Industrial list and the result IL
that the stock market IL left with no
short interest of importance in any
department. The technical condition
is therefore weak The advance that
has been in progress the last few days
is inviting not only liquidation for
the account of persons who hesitated
to sell on the recent decline but also
fresh selling for short account.
In addition to technical conditions
there are several reasons advanced for
selling locks now. The most specta-
cular one is that the railroads are be-
ing turned back to private ownership.
Veterans operating men say the roads
are nothing but wrecEage from ply
steal and organization point OF view.
They say that not only have the road
beds been neglected and rolling
stock and power been allowed to de-
teriorate but the organization spirit
has been destroyed Thousands of
clerks are filling unnecessary po-
sitions and one OF the first acts OF
the private management will be to
let these persons out.
Many of these individuals will not
take kindly to this sudden change in
their fortunes and thousands OF idle
men and women will be about the
country and especially In cities where
railroads have large offices. Wash
ington city has five thousand already
nd will have thousands more. The
companies intend TO wait until Sep
temher first befor" reducing salaries
of the employees who will be left in
their positions. They are not even
conside ring an advance of wages. The
only thing they are figuring on is
the extent Of the cut that will be an
nounced. Threats of strikes will not
have much effect for they realize
that il will probably take a big strike
To settle the question of who liz TO
run the railroads anyhow and 1t will
be good business to have the matter
adjusted as quickly as possible.
Under the circumstances any one
buying railroad stocks is buying into
free fight. Ii is impossible to fix
any value on any railroad stock until
after the interstate commerce COM
mission groups the roads into new
systems and that cannot be done I'M
I'll the law is passed authorizing it.
Even IL the law is passed 1T is going
To take months to find out on what
basis earnings can be calculated for
it's language Is not all mandatory.
Enough is left to the discretion of
the interstate commerce commission
ers TO make serious trouble for OPP
timists in the stock market.
Enterprisine bulls in Wall Street
have been buying low priced rails with
the idea of selling Them out to the
public in the excitement that is ex-
pected following the passage of the
railroad law. There Is not much
danger OF hullish excitement with the
federal reserve bank, condition as low
as IT is and wit hthe rumor that the
Irediscount rate may be advanced to Z
per cent
Defiation is the order OF the day and
along with the defatiCn of useless en-
',leyes in the railroad Offices and the
defiation Of necessary currency in bust
, ness circles there is defation of M
tionaI good will among owners OF lib
erty bonds and ii deiation also OF our
iuStty CpiehraIa6 fnraigu ha J.
ance.
This defation business has many
aspects that the defiators al Washing
ton have not taken into consideration
I 1t NAV be that the commercial panic
that.they are working so hard to bring
about will be good thing for. the
country. But many real good Ameri.
can citizens regret that the decision
/ 10 have a panic has been reached and
( is being ACTED upon. There is always
a question as to how much good
panics do country if any, but the
panic having been decided on. Wall
Street is getting ready for it months
! in advance.
Judging from the action of the mar
I ket Wall Street will be ready in ebou,
six weeks for the worst that can hap
pen and if precedent is followed this
commercial PANIC should be in/ful
swing next September. BY that time
stocks will be rising because there
will be nothing else to de- with thu
dictated currency except play with II
in tho stock market. Er,S,asid is get
ting all the foreign trade and will have
n very large percentage OF the do
mestic business of America before thu
year is out Exports are falling away
rapidly in value and in volume ant
imports arc increasing rapidly. 1t il
Ia good time to have cash on hand
stock market bargains and bargains
in commodities will be available be
fore very long and i'm the meantim,
good interest rates can be obtained Oh
monCg.