New-York tribune., 1921-03-11
Break i'm Rail
Shares sWeakens
Stock Market
Selling by Outsiders OH
Lack of Confidence Helps
Depress Prices; Many
Factors Cause Decline

After many days OF listlessncss, dur
ing which the price tendency was al
most imperceptibly downward there
was yesterday marked heightening of
trading activity. The efforts to depress
prices of professional traders. who for
weeks have been almost tho exclusive
participants in the fluctuations of quo
tations at the stock market. we're facili-
tated by fairly heavy selling by out
siders. whose confidence was impaired
by the weakness in standard railroad
stocks.
The spectacle of two-point declines
in such securities as Pennsylvania and
New York Central is hardly common
one, especially when accompanied by
displays of weakness by Northern Pa
cific, Great Northern preferred, Union
Pacific. Reading and Canadian Pacific,
and throughout the railroad list. The
average of twenty representative rail-
road stocks, in declining yesterday
from 62.55 to 61.20, slumped to the
lowest level attained thus far in 1921,
and dragged The Tribune average of
fifty stocks to the lowest mark Of the
year. In their present downward swing
the railroads are fast effacing the re-
suits of the recovery which came last
year after the Esch- Cummins act had
been passed and the rate increases sub
seauently granted. Before the upward
movement last year began the average
of twenty rails was down to $3.50.
The weakness of tho railroads, which
later spread to Che industrials, caused
the volume of transactions to become
more than double that of the previous
day. There were 80470O sales yester-
day, compared with 386,800 on Wednes-
day. The increase in activity marked
the change from a session in which
professional traders countered against
one another to one in which real liqui-
dation took place. The selling was per-
haps Influenced. too, to degree by the
need for cash for Federal taxes which
fall due next Tuesday.
Senator Cummins's statement that he
would introduce a resolution for a new
Senate hearing rs to the condition of
the railroads, in which charges of mis-
management would be sifted, rumors
to the effect that the government
was planning to take over the rail
roads, and the announcement by the
Pennsylvania that it intended to cut
wages gave dramatic touch to the
fundamental railroad situation, which
observers regard as distinctly unfavor
able. Partly because of the general
BUSINESS uepTeSSlOHy tHe IaliTOaUS IN u
whole are earning less than the 51a to
per cent which Congress defined as
fair return" in the transportation act
of 1920.
Industrial stocks moved lower, too,
and Steel common dropped to the low
est figure quoted thus far in 1921. The
steel tonnage statistics on untitled or
ders was the most unfavorable since
the fall of 1919, but no worse than had
been predicted. However, it reveals
quick reduction Of the volume of ad
vance business and in the opinion of
many observers foreshadows the time
when the Steel Corporation will be
ready to meet the demands of dehation
by reducing prices for this basic COM
modify.
The weakness in stocks was plainly
dissociated from the developments in
European politics, as sterling and the
Continental exchanges were uniformly
strong.
Cotton was slightly weaker because
Of trade conditions at home and in
India and China and grain prices were
somewhat lower, as traders scnsed the
effect Of competition from Argentina.