The New York herald., 1921-03-10
FINANCIAL NEWS
AND COMMENT
Railroad Outlook Causes IN
settlement. Which Extends
to General Recessions.

The reparations situation ceased yester-
day. at least temporarily, TO be factor IN
the stock market. but partisans Of the fall
ing side OF quotations Immediately seized
upon another factor TO forward their op-
erations. This was the railroad outlook.
noted in dealings OF Monday andsTues-
day. was extended into rather general
recessions, some OF them OF considerable
extent. The movement could be consid-
cred parallel to that OF many Industrial
company shares during the last half OF
February and for much the same rea-
son-nameiy. the appearance Of depress-
ing earnings statements. Just as the re-
cent output OF corporation records OF re-
suits in 1920 aided bearish endeavor
among producing company Issues. so the
rails were carried lower by selling based
on the array OF reports OF deficits and
sharp contraction OF net income during
January. In addition TO their effect on
speculative sentiment the market yester-
day had the letter of Z. u. Clark, an In
terstate Commerce Commissioner. to
; Senator Harris OF Georgia stating that
the railroads OF tho country on the av-
erage were paying out IN expenses ninety
cents OF every dollar taken IN.
In declines OF large fractions 20 nearly
points. shares OF roads Of recognized
good position receded abreast OF others
less strongly placed. A number were
under sufficient pressure TO pass below
previous minimum records OF tho year.
Stocks OF the ST. Paul. New Haven,
Great Northern, New York Central. Nor
thern Pacific, Southern Pacific and
Union Pacific companies were particu-
lariy prominent In the decline, at the
Same time that steel and miscellaneous
shares were displaying steadiness or In
difference to the selling elsewhere. To-
bacco and copper Issues, however, fell
away in the afternoon. There were only
meagre signs OF rally toward the close
OF business. Call money was at Z per
cent. all day and the investment market
was somewhat quieter than it was in the
preceding two or three days dealers
having TO contemplate. besides some
what congested situation Of recent offer
ings, the prospect OF s4oo,o0O,0o0 OF
forthcoming Treasury certificates.
The railroad embarrassment from IN
adequate net profits is not pleasant for
investors to contemplate. but the sit
uation Is not altogether devoid OF favor
able factors The roads have patiently
arrived at a pass where some relief must
be found, and Il cannot be found in a
stimulation OF traffic. General business
conditions preclude that. Consequently
recourse must be had to a reduction
Of costs. The Pennsylvania's method
of reducing salaries all along the line
is an earnest OF what seems likely TO
\ occur on many properties, and the
widespread movement for the pairing
down Of wages. affecting all sections Of
the country. indicates that the railroad
managements have undertaken strenuous
measures to get back to q strictly
1 business basis. They are asking that
their wage accounts be reestablished on
levels comparable TO payments In m
dustrial establishments. and il is hard
\ to see how public opinion can maintain
anything else than sympathetic atti-
tude toward the movement.
The question can be asked again--it
has come forward frequently during the
decline OF industrial stocks this winter
whether steel issues and some others
have not gone far In discounting the
depression OF business The weeks
trade surveys note no betterlnent Of
steel mill operations. The present out
put, says the Iron Age, is hardly 40
per cent. for the country as a whole,
only two-thirds of what is considered
necessary 10 meet ordinary wear and
tear"
Sterling exchange opened more than a
cent above Tuesdays last quotation, and
was strong throughout the day. In fact,
the rate at the highest price Of the ses-
sion. S,ssI5. showed a recovery of most
Of the reaction which followed the
decision to occupy German towns.
Wheat was strong. and cotton left off
steady after receding from an early ad-
vance.