Evening star., 1921-12-22
OPENING SOFT, But
MARKET RALLIES
Buying of Equipments Over.
comes Weakness in Oils.
News of Day.
by STUART p. WEST.

NEW YORK, December 22.-lhe
selling movement which set in yes
terday on the stock exchange con-
tinued through the first hour of to-
days session. 1t bore heaviest on the
oil shares. but nearly everything on
the list went down a half point to a
point further.
Midway through the forenoon the
decline was checked and prices hard
ened under the influence OF some
rather sharp upbidding of few spe-
cial stocks. Among these We're
American Locomotive. Burns Brothers
Coal and Texas and Pacific.
There We're at least two items in the
outside news which had their effect
upon the movements of Individual
stocks. The downward revision, long
anticipated. in wire and related prod
ucts. was announced by one of the
subsidiaries of the United States Steel
Corporation.
While not affecting Steel common
itself, this price-cutting brought quite
Il bit of selling in the Independent
SteelS which, on account of their
higher operating costs. are not so
well able to stand such action.
Word that salt water had been dis
covered in the Mexico oil field was
responsible for some of the pressure
against the oils. although it later de-
veloped that the Pure Oil Company.
whose stock was most depressed. has
no wells in the damaged territory
The selling in the oil group. both yes
terday and today, appeared to be en-
tirely due to temporarily weak con-
dition in their market rather than to
any change in the oil industry itself.
The reduction in gasoline prices by
the Standard Oil of New. Jersey is
evidently only a local adjustment. Ii
has no significance for the oil trade
generally.
Burns Brothers.
The more immediate reason for the
strength in Burns Brothers Coal was
the voiding of the injunction which
was secured some time ago by one of
the holders of Farrell Coal preferred
restraining the merger of the two
companies. There is now no obstacle
in the path of this consolidation, and
it is expected that the stockholders
will meet at once and authorize the
new stock issues. The new Burns
Brothers A will be an per cent divi-
dend payer by itself.
American Locomotive.
The remarkable action of American
locomotive. which started up out of
weak market and easily went through
it's previous high for the year, might
have seemed to call for some special
explanation. But actually there was
nothing to be said beyond what has been
pointed out more than once before. A
lot of people have been selling American
Locomotive short because it seemed too
high for a per cent dividend payer
and also because, until the equipment
business picks up more than it has, an
increase in the dividend appears un-
likely.
No doubt the running in of a part Of
this short interest had something to do
with the rise today. But apart from this
American Locomotive-that is. large
portion of it's available supply-was
gathered in some time ago for the pur-
pose of permanent investment. This
accumulation was based, not upon the
present dividends, but upon the consid-
Grafton of the intrinsic value of the
stock as worked out on its treasury as
sets.
st. Paul Weak.
St. Paul stocks were very weak to-
day. both the common and preferred
making new low records. There is
nothing new in the financial condition
of the road Earnings have been be-
low fixed charges for the entire year.
1t is true that in October one-twelfth
the annual amount was reported as
net income. but inasmuch as normal
ly October is the best month in the
year. it could not be said that even
on this basis charges were being
earned There is, however. a more en-
couraging aspect to the situation.
with the exception of April, st. Paul
reported substantial gain in net
operating income every month of the
year.
Starting with deficit of s1,214.0O4
in January, there was a steady gain
until October showed net operating
income of $2.51O,147. Few of the So
called strong railroads have shown
such consistent improvement. The
roads cash position is understood to
be strong, and the only near maturity
is the s25,000,000. note held by the
government, which becomes due on
March ] next. 1t is expected that
this will be renewed. In all prob
ability. November and December
will be disappointing, but after the
turn of the year. when the reduced
rates on hay and grain go into effect.
traffic will undoubtedly be greatly
stimulated.