Evening star., 1921-08-03
RAILS TURN WEAK;
CLOSING IS HEAVY
BY STUART p. WEST.

BY STUART r. wESTs
NEW YORK. August 3.-Early sub
stantial advances were forfeited when
standard railroads turned weak and
Of doubtful earning and dividend pros.
poets. Sales Appropriated 65o'ooo
shares.
Closing was heavy.
NEW YORK. August 3.-After
strong opening. in which the divi-
some cases. making new highs Tor the
current movement. and the steeis
showed marked firmness, the stock
market today relapsed into irregu-
larity and dullness. No develop-
ments of Importance sufhcient TO az
feet the industrial and trade situa-
tions were at hand. and in the lack
of any sustained buying power there
was little motive to maintain the
improvement.
1t was Significant, however. that
whereas month ago the dimcuities
of Industrial corporations resulting
in reduced and passed dividends were
tive circles, now emphasis is placed
on the improving outlook for the
rails. Then the market could not ad''
vance under the shadow Of the de-
pressing influence the business trou-
bles of the deflation period had
ers are not SO sure even Industrial
shares may not be favorably affected
In sympathy with Frightening pros
poets elsewhere.
Rail Situation Better.
Meanwhile conditions have not ma
terially changed. 1t is only differ
ent point of view. True, the rail-
road situation is definitely better
Control of expenses under private
a re
in turning a decreasing gross into an
increasing net. Much is hoped for
from the administrations plans for
funding the sums due the govern
ment. More is expected from the
wage cuts. But practically all this
could have been foreseen. And there
are still dividend uncertainties to
face in various quarters. some due to
the drop in prices and some to de-
creased demand for the product dealt
in. If any of these come to light. 1t
will be interesting to compare the
weight they will carry with the
speculative fraternity with similar
developments thirty days ago.
Dispatches from Washington re-
port sentiment in Congress favorable
toward those of Secretary Melons
proposals which tend to reduce taxes
and unfavorable toward those which
tend to raise them. All Of which is
not help solve the Secretary's prob
lem. the magnitude of which no long
range view of the financial situa-
tion can afford to overlook.
Tax Proposals and Bonds.
One detail of the tax proposals is
of considerable Importance to the
bond traders just now. If the sur
taxes on large incomes are to be cut,
the advantage enjoyed by the tax
1a-i1I
ingly diminished. And bond traders,
by the way. are very active at the
present time. There is, perhaps. some
evidence of public participation in a
speculative way in bonds. which is
more than can be said of stocks.
Purchasing OF Cuban raws at the
newly established high set by the
Cuban commission seemed to indicate
confidence today in the stability of
the present quotations. Sugar stocks.
however. were little affected. and
American Sugar Refining was definite
ly weak. A fair demand for tobacco
stocks was displayed by the quota
tions, which SO far have shown no
concern over the prospect of higher
taxes on tobacco products. Substan-
tial premiums in the stock loan mar
ket were evidence that the bear"
party in the industrials. which have
been favorite objects of attack, was
Still large.
United Drug Weakness.
The weakness in United Drug to-
day followed closely on the heels of
a statement by Louis K. Liggett.
president of the company, who said
that should his stock have to be seld
in the market undoubtedly United
Drug would sell much lower" Lig-
gets affairs are now in the hands of
a board of trustees. among his specu-
lative holdings being $4,000 shares of
United Drug bought between 142 and
80. The confident bear party took the
statement by the president Of the
company to be an invitation to them
to start selling the stock. and there
was no let-up in the hammering in
an effort to force the $4,000 shares
on the market. AS to the United Drug
Company itself. Mr.. Liggett in his
statement declared ut is sound as a
nut"
New York, Chicago and St. Louis
(the Nickel Plate) has shown excel
lent earning power even during the
current depression, although mainte-
nance charges have been heavier than
a year ago and have averaged about
80 per cent of gross. The net for the
first half year was $2.016.s33, which is
$67s.000, or more than 81 a share of
common, in excess of fixed charges
preforrad dfyidapdo For -,