Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-04-10
STOCK MARKET
IN NEW STAGE
BY STUART p. WEST,

,,.ri-. io.h' April III ne STOCK
SWIM bas M course OF us upMaTo
sncc11I,t;~o n nt ehssieu me nlsnls
ment Of nr;n.. Nnele lhs NOV
more irragn,, ny ~ nc inusn
r;sl, anu therefore more
sins 49, ~ io th there are sun nc
Reactions are likoIv =, - ,,'ar e.
ulent aud sbar, 49,
some time ,at h.foro ,,+L =,
ers in touch with tba rsiaa e., ne =.
the big cornor,tion. .;n 80,
the chance 10 nnin,d No. 70 =, !
Indoubt edly the neriod If distrih,-
tion has begun r-itb tna 80, !,
nouncements of ston,, di,.;dao1l -
have been made. but 81 long az NOR,
of this meIon-ciIttin, ren,.;ns ~ IL
done just So long veil mo incentive
to speculation continue N-au street
is of course, lending q creduIous ear
TO many run1ors of bon,,s-pivins
which VIII never materialize But
for some of this possip there il suh-
stantial foundation. There ara
number of other companies which
VIII follow the example of Crucible
steel. Studehaker and International
Motors and declare large stock divi-
bends. There are others which have
capltal readjustment plans by which
present owners will get new stock for
Old. and in this way get the benefit OF
me increase in earning power and in
treasury assets that has occurred
uurinE the last five years.
nul this program is completed
uhli the big stock dividends hav.
come OH market prices and until
hish-priced issues difficult to sell have
neen replaced by multiplied units OF
ioW-priced issues easy to distribute
the real danger stage will not have
heen reached. The market has proved
this week again how it can become
enthusiastic over stock dividend an
nounccmentS.- and how with these as
The main impulse every other con
Sideration is brushed aside. The ar
rival Of some $50, 900 900 of English
gold with a probability of more to
come has eased the money situation
Call funds at 6 per cent are back 10
what may be regarded as normal
FOR the first time in a year and a
half the deadlock in the time loan
quite likely there is some connection
between the Offering of money for
fixed periods at S and 81. per cent
and the Simultaneous publication OF
the new railway security hotations
a time money market in the frozen
up condition that has existed for the
last year or more and especially dur
ing the last six months would greatly
increase the difficulties of banking
syndicates handling the PENNSYLVANIA
the New York Central and other bond
issues still to come. Nevertheless
the release of money for time loans
is proof that the general credit posi-
ton is more comfortable than it was
With the heavy spring demands over
the money market is not likely to be
disturbed until the crop moving re
quirements commence to make them
selves felt toward the end of the sum
mer.
The speculative outlook with the
fear of tight money largely removed
is more promising at the moment than
the investment outlook To be sure
the investment bond list has long
been getting ready for the new rail
way issues. which it was known Were
coming. and which it was also known
would be put out at very high rates.
Still the actual discovery that the
premier railroads of the United States
which a decade ago were able to Dor
row on a AZ to per cent basis are
now paving with bankers commits
sions reckoned in, from s to Sl2 per
cent for their money, comes as some
thing of shock Money is d COM
modify, and as such. its price has gone
up along with those of all other COM
modities. There is nothing disquieting
therefore in the fact that companies
like the Pennsylvania and New York
Central are about to offer their new
short term bonds on per cent
basis. But it does make 1T very clear
to holders of existing railroad bonds
and stocks why their securities have
been dragging along at low prices and
falling to respond even slightly TO
the great rise in the speculative in
dustrials. Nor can they very Well hope
for much Improvement for long
while to come. Fresh occasion has
likewise been given to remark upon
the folly of our government war finan-
ciers. who thought they could float
vast issues of liberty bonds on 4
ner cent basis. Naturally the average
small investor who bought libertys
at par and now sees them down below
90 is feeling pretty sore at the whole
investment game, and is apt to have
resolved to keep his money hereafter
in the savings bank. While the fear
ful bunpIing of the government war
financing has been a blow to the
investment market on the one hand
tho excessive surtax provision in the
income tax law has been equally dam
AGING on the other. People who have
tn NV half to three-quarters of
tbeir income to the government can
80 .fford to buy taxable securities
aver On a 7 per cent basis. For them
tha tay EXEMPT liberty 31as are still
- hetter nronosition than the Pennsyl-
1,.n;a 7s or any other high class tax
ME bond that may be offered.
Present bond prices are low enough
fo yl1n