Evening star., 1921-03-29
TELEPHONE LEADER
IN STRONG MARKET
BY STUART p. WEST.

NEW YORK, March 20 tSpeciaD.-
There was nothing in the course OF
events today at variance with the
view of the stock market in mar
row trading area. with no major
Traders working on the short side
followed up yesterdays efforts with
a further drive against number OF
vulnerable stocks in the early part OF
the session. They succeeded in
breaking a few industrial specialties
about any fresh liquidation in the
general list.
At the low prices of the forenoon
the market had had a very thorough
reaction from last weeks high points.
and was ready to respond to any inn
pulse of a favorable nature which
might come from the outside. This
impulse was furnished shortly after
midday by the unexpected announce
ment that the annual DIVIDEND on
American Telephone and Telegram
shares had been raised from to
per cent
Urgent Demand starts.
Immediately there set in an urgent
demand for other public utility is
sues. following in the wake of a g.
point jump in American Telephone
stock itself. When the recently Gre
ated short interest endeavored to
cover they found the market quite
as thin on the way up as 1t had peen
on the way down. and as 1t appeared,
the upshot of yesterdays experiment
on the bear side was that it resulted
in loss.
American Telephone is scarcely
fair representation of the situation
even in properties Of it's own class.
1t has always been the practice to
devote all the surplus earnings, apart
from what is necessary to make
reasonable showing for the stock, to
the strengthening of the various re-
serve funds. Therefore. what the pup
able for dividends and what Is the
sum that would be available were ap
propriations anything like the normal
are two quite different things.
Confidence in outlook.
1t is certainly no surprise 10 learn
from the officials statement thst
9 per cent dividend would have been
warranted at any time curing sne
way of saying that American Tele-
phone has always had very large
potential fund available for dlVl-
dends. which has simply been plow-
ed back into property. and has not
Few other public utility enterprises
are in a position like this But. new
ertheless, the action of the American
Telephone directors may fairly be
construed as an expression of con.
fidence in the outlook for lowered
costs and increa sed earnings Of all
undertakings which have not been
free to advance their charges with
out consent of regulating agencies,
and this is the way the market took
it today.
Gas Shares Also Feature.
The upturn in the telephone and
gas shares was the feature of the day.
Scarcely second in point of interest.
however, was the revival Of interest
in low priced rails, under the lead of
Kansas City Sl1thern. AS already has
been pointed out, the Kansas City
Southern shares have been quietly
bought for some time past on the
strength of the remarkable showing
in earnings which the company made
last year and has continued SO far
this year IN the face of the most ad-
verse circumstances.
The movement in Kansas City
Southern led to sympathetic buying
in st. Louis Southwestern. Rock
Island. ST. Louis and San Francisco
and one or two other members of this
group, and served to Offset among the
dividend paying rails the effects of
the deficits which many of them have
still been reporting for February.