New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-01-10


Until the new law was passed Con-
gress never definitely assumed the task
OF assuring the railroad companies q
fair return on their properties. AL
though the Esch- Cummins act involves
no rigid guarantees, its purpose is
manifest. The Interstate Commerce
Commission, in dealing with the mat
ter Of mergers, ought to seek to light.
en- the burden Of shippers and passen-
gers Of the railroads as far as is con
sistent with providing the companies
with a reasonable return. In SO far
as the removal of barriers which tend
to hamper the railroads earning ca
pacity and their efficiency would help
| to swell the net income of the railroads
without augmenting the burdens of
thu consuming public, permitting
mergers that would not throttle com.
petition would perhaps be helpful.
But with decision resting with pub
lie officials at Washington. the only
reason that should be permitted to de-
termine consultations should be a
desire to enhance transportation eff
cheney and reduce the cost to the pub.
lie rather than mere aspirations for
profits through stock transfers.
AS this situation begins to work It,
self out there will undoubtedly be
flood Of rumors about possible consoli-
dat!ons. and not q little speculation in
the securities Of the stronger and
weaker roads that may be affected
Already Wall Street is hearing whis-
perings Of probable realignments.
It would be misleading to refer TO
last weeks upturn in the stock mar
ket as rise. 1t was really a recovery.
The rebound from the period Of pre-
c;pitate declines caused by exigencics
Of the season and by an emotional
sweep which warped spectators judg-
ment Of intrinsic values began on the
last Wednesday in December. Since
the turn came virtually all Industrial
and railroad stocks have leaped to
substantially higher levels. Those
stocks which suffered most acutely
have been the leaders in the advance,
which more truly was an effacement Of
share Of tho losses sustained during
the panickv closing weeks of the year
just closed.
Tho impulse to rally has not been
confined to the stock market. but also
swayed the course Of the dealings in
high grade bonds, in commodities and
in the European exchanges. There was,
however, more irregularity in the ex-
change and commodity marts than in
the security markets.
Since the squirt in stocks has been
a recovery rather than an ordinary
rise, skilled observers are naturally
skeptical as to the permanence of the
movement. The upturn has been IA
cilitated. if not caused, by the buying
back Of securities by those who had
sold them in December to establish
losses that could be deducted from
1920 income taxes. Moreover, particu-
larly In the market for bonds and pre-
ferred stocks, the investment of funds
that accumulate additionally around
the first of the year has perhaps aided
the upward movement, which has gained
momentum both from the buying by
those who usually are attracted to the
market merely by the spectacle of ris-
ing security prices and from extensive
covering operations. Besides these
factors, undoubtedly some Of the buy
ing has been an expression of belief
that credit conditions were easing un-
der the surface and that the duration
Of the depressed state of trade w6lld
be brief.
Normally such markets as we have
been witnessing in the last week invite
streams of proft-taking sales by those
who purchased stocks somewhere near
the low. Undoubtedly the market will;