The New York herald., 1922-05-30
FINANCIAL NEWS
AND COMMENT
Railroad Labor Boards De-
cisiOn Has Buoyant Effect
on Industrials.


mendation that wages of maintenance
of way workers be reduced had more
positive effect upon speculation yester-
day than did the freight rate cut last
week. but it could not be said that the
stock market became excited about It,
While railroad shares. especially those
of coal carrying lines. were firm at the
start and developed considerable
strength afterward it was the industrial
list which stood as the mainstay OF
business. Petroleum issues were de-
cidedly buoyant both in the New York
Stock Exchange and In outside markets.
and there was the familiar demonstration
of forceful buying in tobacco. steel and
Sugar shares Undoubtedly the market
for rails was held In check by knowl-
edge that the Supreme Court might hand
down one or two important decisions
during the day. Both the Reading and
Central Pacific rulings appeared, the
latter before the close of trading, and
acted to incite some realizing sales. es-
pecially reflected In a point decline of
Southern Pacific from its best level.
Due to the railroad wage finding and
the court decisions, the railroad situa-
ton was the subject of more discussion
than anything In the Industrial field.
The fact that, despite the prominence
of rail matters, Industrial stocks con-
tinued as the chief media Of speculation,
carried its own suggestion about the
pubilcs attitude toward the business
outlook. The week end trade news was
encouraging in the main, especially In
respect to information that steel mills
in the Youngstown district were operat-
ing at about so per cent. of capacity.
Activity of that degree indicates that
fuel supplies are adequate to the de-
mand.
The $4S,0O00OO reduction in the railroad
wage bill entailed in the maintenance of
way schedules was viewed in the finan-
cial district as partial compensation to
the carriers for the rate cut prescribed
for July l. But the total by itself. nat
urally, was considered much less impor-
tant in it's application than the deduc-
tions to be made from II. AS no more
than 80 per cent. Of all railroad en-
ployees were affected, 1t was irnmedi-
ately assumed that rulings yet to be
made on other classes of workers would
reduce the wage outlay by 500. co., coo
more. 1t remains to be seen. of course.
whether or not this estimate is close to
actualities. There is also the unan-
swered question whether the employees
will accept the decision without objec-
ton. AS far as the security markets
were concerned. there was no reason
yesterday to change the opinion voiced
last week that. while the eauali,ing of
wage and rate cuts II deyoutiy hoped
for still the major influence In the
market is vested In figur o. expand
ing traffic.
An immediate product OF the Supreme
Courts decision that the Southern Paci-
flc's ownership OF the Central Pacific
violated the law was an abrupt advance
of more than 10 points In Southern Paci-
fic collateral trust Is. That issue is Sc
cured by deposit of Central Pacific
stock. A dissolution of the Southern
Pacific's ownership would probably en-
tail the retirement of the bonds. The
courts findings Jared somewhat the
preconceived speculative ideas that this
is to be year Of railroad mergers, but.
as matter of fact, no deductions are
to be made from action In q Government
suit which was undertaken years ago
and applied to a specific and not to gen.
eral conditions of competition. The
lower court has some more work to do
on the Reading segregation plan before
1t is completed
The hardening Of call money from
to AZ per cent. implied no change in the
money situation. but was likely to in
crease the flow of funds from the in
terror to New York.