The New York herald., 1921-03-02
FINANCIAL NEWS
AND COMMENT
Rail Stocks Recede on Bearish
News-Foreien Exchanges
Are Firm.

The impulse toward lower prices. so
'ons factor In the market for industrial
stocks. reached out into the railroad de-
partment yesterday, urged by several
developments. Chief among these was
the refusal OF the Interstate Commerce
Commission TO accept the plan of the
Burlington system for the issuance OF
sfoe, 900 In new bonds. AS this pro-
posal was the pivot upon which swung
tentative measures for meeting the
S2i5, ,o00.o 900 maturity OF tho Burlington
Joint per cent bonds on July next
the speculative community Immediately
thought in terms unfavora BILE to Great
Northern preferred and Northern Pacific
shares, and these were depressed sharply
In the first hour OF business. Undoubt-
edly the Great Northern and Northern
Pacific. which stand sponsor for the
maturing Burlington bonds, will have TO
recast their plans speedily. but 1t would
be strange, indeed, II roads with the
high credit of the three involved could
not readjust their programme in four
months. The bond market while rather
full of new issues at the moment. gives
promise OF resumption OF activity be-
fore long. which will assist the COM
pletion OF refunding plan for part of
the large maturity at least. An ex-
change of the Burlington bonds when
they fall due for a new issue would
probably not be unwelcome to many
holders. although this Is not presuppos-
ing that the authorities have this In
mind. Nothing definite is known of the
shape that revised plans will take.
The Pennsylvania Railroads report
for 1920 was another item in the de-
pressing news Of the day A heavy
deficit from operations had been forecast
from monthly statements, but the full
amount of s4S,oO0.O0O was enough TO
startle a stock market already in a
nervous condition. The roads invest
ments helped to offset traffic results.
Pennsylvania shares recorded a loss of
u, and this, with the recession Of 2%
points in Northern Pacific and ! Il points
in Great Northern, unsettled a number
of other usually stable issues. The turn
over of stocks was increased In COM
parison with preceding days of the week
by sales of rail shares. but the aggre-
gate of transactions continued too small
TO Indicate any important liquidation
Again the professional trading element
supplied most Of the business, and. while
they met with only moderate success In
certain Industrial issues which were
affected by unsatisfactory earnings state
ments or other items early in the present
reaction, there were numerous stocks
which fell back abruptly. The copper
group was made vulnerable by the pass
ing of the Kennecott Corporations divi-
dend. Call money was per cent. for
all borrowing.
II cabled reports Of the London con-
ference on the German reparation had
reflection In the stock market, 1t lent
force to the generally bearish situation
without applying to any particular class
of shares. The foreign exchanges. espe-
cially sterling francs and marks. may
have been supported; at any rate, in
stead OF receding when news came OF
the German proposal for a drastic cut
OF the proposed indemnity, these rates
were firm. Sterling closed three-auar-
ters OF a cent higher than on Monday.
What the Street read into the cabled
dispatches was that the German repre-
sentatives had put out a feeler. without
hope or meeting with acceptance but for
the purpose Of establishing possible
talking point for further dickering with
the allied commissioners. That Is fully
in keeping with Teutonic practice. The
greatest danger from 1t, in Wall Streets
long distance survey Of the situation, Is
that it might lead to failure OF COM
plete settlement or the reparation prob
lem at this meeting.
Cotton rallied rather briskly for a
time and left Off with moderate re-
covery, a movement which had been ex-
pected sooner or later because OF the
persistent decline for fortnight. A
better tone In Liverpool urged short COW
erlng here. Grain prices moved up
slightly.