The New York herald., 1921-03-14
FINANCIAL NEWS
AND COMMENT
Influences Back Of Heavy Sell
ing of Stocks Continue
Without Change.
RAIL SHOWINGS ARE POOR
Outlook Is Full Of Uncertainty
With Problems Of Roads
Looming Large.
RAIL SH0WINGS ARE POOR
~ WILLIAM ". CRAIG.

sions from last weeks occurrences ii
some really new influence behind tho
heavy selling OF stocks. The genera
statement that prices OF stocks anc
bonds must represent fully readjust
can be expected to grow stable hardly
satisfies owners of deprecated securi
ties; but 1t is difficult and risky to &c
further than this. What happened L
cause many railroad shares to approach
the lowest levels Of 1920 and break
through In some cases was just what
might have occurred fortnight q
month, or two months before. This
was the emphasis laid by poor op-
Grating results in January on the highly
unfavorable situation OF railroad prof
it's. taken either by individual roads or
by regions. The results OF operation in
November and December we're also un-
satisfactory; IN those months the fig
ures OF net revenue and the starvation
return on invested capital told exactly
what was going on. But it remained
for a dark array OF deficits reported
during two or three days last week to
release a quick output Of sales Of rail-
| read stocks, and once the markets un-
derpinning became weakened. 1t was
easy enough for the professional trader
to keep the price procession moving
downward.
| Wages Not New influence.
There was no more reason to ascribe
brand new application of the railway
labor situation 10 the weeks events.
| important as they were, than 10 the
matter of gross and net income For
nearly month negotiations had been
going on between railway employers
and the unions; there had been efforts
by the Erie and several other roads to
put reductions into effect-only to be
checked by the Railroad Labor Board
and the receivershtp OF the Atlanta,
Birmingham and Atlantic had showed
long before stocks began TO fall sharply
some of the complications which lay
ahead in the wage field But in re-
spect TO the wage controversy, as In the
case of poor earnings, a flare up Of
interest in current proceedings rather
than any new quality of them was
enough to bring reaction in quoted
stock market values.
There was no doubt that meagre
earnings, current and prospective. under
existing conditions, and the movement
| to reduce wages. united In a Joint In
| fluence OF depression. Something odd
I might be found in this by one not fa-
millar with the psychology of the mar
ket place. The effort to get wages
down will. IL successful. result in better
railroad income; hence IL might be
thought that tho one factor ought at the
| least to neutraiize the ether, and IL the
belief IN the justice OF railroad conten-
tions were sufficiently strong and adj
vance instead of decline might have
been looked for.
/ Much Uncertafnt I'm Outlook.
The outlook, however, contains too
many uncertainties for a constructive
argument for security quotations TO
| come Just now from the wage move
ment. The reasons are twofold: First,
| the certainty that extraordinarily high
railroad freight rates kill traffic implies
a downward readjustment OF carrying
charges when wages are lowered, and
second, the equal certainty that wages
! will not be cut without strenuous con-
I test, makes IL impossible to determine
how soon the carriers will experience a
| genuine and effective release from q
| heavy burden. The intention of SEN
l ator Cummins 10 ask Congress 10 In
\ vestigate the entire matter Of wages and
4 income has lent for tho time being a
third item of uncertainty to the trans
| portation problem. for the scope of such
an inquiry could hardly be determined
I until It had progressed for considerable
I time. The Senator was vitality con-
cerned in the formation of the trans
portatlon act OF last year. This being
the case, the stock market raised last
week the question as 20 whether or not
a new movement for legislative inquiry
might reopen the entire rail situation
for revision.
Solution OF Broad Interest.
As a matter or economies, the rail-
road troubles appear 70 be amenable 70
| the solution which the railway mana
gers have brought forward. If the
| pending conferences between the Penn
sylvania, New York Central, New Haven
and other companies with their labor
brings out adequate arguments for
wage cuts in cost OF living figures and
fields OF industry. there is no question
4 where public sentiment will lie The
1 - .Tn NI.s.