The New York herald., 1922-05-29
FINANCIAL NEWS.
AND COMMENT
Calm Response Of Stocks to
Freight Cut Proof Of I'm
proved Conditions.
CAR LOADINGS GAINING
German Loan Plan and Repara-
tions and Rate Ruling Hold
Streets Attention.
CAR LoADINGs GAINING


July /, was clear evidence that the rail.
road and general business outlook has
improved measurably this year. One
could conceive of sharp fall of rail
stocks and reversal Of bond prices
IL the Interstate Commerce Commission
had made similar decision in Noyem-
Der or even in March. The expectation
of compensating wage reductions for
the near future probably helped to
stabilize sentiment after the rate news
appeared, but the more important factor
was knowledge that railroad traffic was
expanding. Leaving aside the coal
movement. the weekly car loadings. OF
the last two months have displayed a
really remarkable recovery Of the busi-
ness turnover. With the best traffic
months Of the year lying ahead, the
most recent records seem to forecast
an enlargement Of bulk which always
goes far in counterbalancing low. rates
on particular units Of freight classifI-
cations.
A picture Of railroad freight conditions
can be obtained by referring to records
of several weekly reports on car load
ngs. Gains have not been altogether
consistent or uniform. but they have
been fairly steady from week to weel.
since October. In the last week of
January, before the growth Of steel
buying drew attention to the general
business structure all sorts of freight
loadings were per cent. greater than
they were in the corresponding period
of 1921. Taking weekly reports at ran
dom. the American Railway Associa-
tion's figures showed that in the week
of April Is cars loaded with merchan-
disc. largely manufactured products,
were 6s191. or about 1l1a per cent more
than those OF year before.
Coal Loadings Fall Overcome.
In tho week of April 20 they were
s1,sS9 more than they were in the cor
responding week of 1921 and 1881 in
excess of the number reported for the
week Of April %. The April results
disclosed, naturally, heavy declines in
coal car loadings from the 1921 record,
because of the strike, but in the week
ended on May 13 a decline of more
than so per cent. in coal traffic was
overcome by increased movement OF
other freight. all loadings being c,eic
cars larger than they were in the cor
responding week of the preceding year.
More manufactured goods, more live
stock, building materials, grain and
other products, except coal, have been
moving into consumption than in the
first half of 1921. That recovery is in
keeping with. events after other great
periods of business depression, but 1t
is more impressive this year than it
was in 1908 and 1895 because domestic
demand for goods is larger. proper
tionally. to the whole demand than 1t
was in earlier years. when Europe,
Asia and South America were active
buyers in American markets.
In the light of traffic movement and
outlook the Interstate Commerce Com
missions ruling that 5A per cent. in
come on railroad investment is to be
aimed at through the rate schedule
becomes academic. Holders of rail
stocks have no assurance that that
percentage of itself would strengthen
their investment position because roads
fell far short Of earning the theoretical
5lk per cent. (and even more theoretical
per cent? of the Transportation act
in its two years of application to them.
In one month of this year class car
riers came close to earning at the rate
OF per cent. II there had been a
normal movement of coal in April prob
ably they would have come close to 1t
again and the May result would have
been improved substantially by that fac
tor.
Wage Accounts Less Topheavy.
The holder of railroad stock or bonds
is less interested in a fixed income on
his property than he Is in the ability
of that property to be maintained in
the highest state of physical condition
a. the same time that a reasonable re-
turn Is had on the investment. The
way in which many OF the railroads
have been forced to skimp maintenance,
hold back extensions and limit the num-
ber Of cars and locomotives in the last
year and a half shows that something
has been wrong somewhere. An ex-
animation of their wage accounts
shows pretty clearly what that some-
thing is.
The financial interest of last week
was divided between the freight rate
ruling and the international banking
conference held In Paris. Although
the news from that conference was
meager the most satisfactory item was
the evident eagcrness of all participants,
including the German representatives,
about the principal subject In hand.
That was the projected German loan
with its appended matter. the repara-
tions bill. Many bankers In Now York
expect that loan will be shaped and
will meet with good reception among
investors in many countries. provided
that Germany shows that she is ready
and willing to assume the burden. It
Is apparently less a market problem
than it Is a problem of the borrowers
attitude.