New-York tribune., 1921-05-21
Break i'm Rails
Starts Selling:
Stocks Decline
Adverse Dividend Action
Factor i'm Unsettling
the Market; Industrials
Also Are Depressed d

Adverse dividend developments, com
ing as more or less OF q surprise to
tho financial community, disturbed
day and caused an increase in offerings
which forced general declines through
out che trading list. The reflection of
the unfavorable condition of industry
in the country as shown in the days
news and the rumors that other impor-
tsnt corporations must reduce dis
bursements to stockholders or forego
payments entirely was not new TO
Wall Street, but it served as a SELL
ing argument for the professional
traders working for lower prices. With
domestic developments in the fore
ground. the international situation was
relegsted temporarily to less
prominent place in financial considera-
tions and apparently did not figure
much as a market factor.
The news of the deferring of the
quarterly dividend or Chesapeake &
Ohio stock reached the market early in
the day and was q signal for heavy
outpouring of railroad stocks, the issue
directly affected falling away rapidly.
The announcement was unexpected, as
the action of Chesapeake stock indi-
Gated, although the postponement Of
dividend action by the Hooking Valley
Railroad on Thursday had been ac-
cepted in some quarters as foreshadow-
ing it, In ss much as the Chesapeake &
Ohio controls the Hooking Valley
lines. The deferring of the Chesa-
peake dividend is the fourth in series
Of similar developments in the rail-
road field and focuses attention upon
the extremely difficult situation con-
fronting the transportation companies
by reason of their inability to make
operating expenses balance operating
revenues. While a reduction in the
wages OF railway labor is in. prospect
this will not come for at least another
month, and in the mean time many of
the roads are continuing to run behind.
The selling of the rail shares yester-
day resulted in the average price of
twenty representative railroad issues
declining from 64.25 to $3.50. The
break in Chesapeake & Ohio carried
that particular stock from 63 to 58,
while other old line rails such as
Louisville & Nashville, Great Northern
preferred, Northern Pacific, Atchison.
and Southern Pacific closed substan-
TALLY lower.
Industrial shares were moved lower
in sympathy with the railroad shares
and were also affected in the case of
particular issues by the passing of
the American Linseed dividend and
rumors of similar action by other in
dustrials. Crucble Steel was espe-
eially hard hit because the company is
one of the steel independents which is
expected to announce unfavorable divi-
dend action shortly unless an ex-
traordinary recovery occurs in the
steel industry.
Generally speaking, however, the in
dustrial list stood up better than the
rails and the average price of thirty
leading industrial stocks closed at 1927,
against 1897 the preceding day. Deal
ings at the exchange were not heavy
despite the general tendency to sell.
and the days turnover ran but slightly
in excess Of 100000 shares.
The investment markets tended to
move narrow in expectation of the
new French loan which will probably
be announced for public offering or
Monday. Call money held at 7 per cent
throughout the day, although the stu
alton at this center has undergone
marked improvement in the course of
week, as disclosed in the Federal
Reserve statement. The foreign ex-
changes were slightly easier but the
movement was not regarded as signif-
cant in view of the extent of the recent
recovery in francs and sterling. The
grain market was strong, with wheat