Evening star., 1922-05-24
RATE CUT
NOTBEARFAcT0R
Assurance of Minimum Re-
turn Satisfactory-Profit-
Taking Over.
ABY STUART p. WEST.

Z
NEW YORK, May 24.-The Interstate
Commerce Commissions order reducing
freight rates afforded quite test for
/ the markets today. 'hh
In the first place, while some such ac-
| tion had been talked of for long while.
| the actual announcement was unexpect-
ed at this time. In the second place the
| form of the order was a surprise.
The idea had been that there would
be some rather drastic overhauIine of
/ certain classes of rates-steel and coal
especiaily-but that there would be no
general cutting regardless of classifca-
| tons.
! The average reduction is given as 10
per cent; as a matter of fact in certain
| sections-notably In the middle west
and in the territory served by the trans
continental hnes-it is considerably
more.
! Takes News Calmly.
1t was quite impressive that the
stock market should have taken the
news as calmly as it did.
Ostensibly from speculative view
J point the, first effect was unfavorable
| for railroad shares. and favorable for
| stocks representing the big shipping
AS it happeRed. however. there was
no rush 10 sell the rails, nor was
there rush TO buy the ipdustrials
which stand to benefit most from the
! rate cuts. There were no explana
tions for the steadiness of the rail-
way list.
/ One was the anticipation that by
July 1, when the new tariffs become
effective. the labor board will have
passed upon the wage cases, and.
! quite possibly, will havs granted
reduction sufficient TO counterbalance
the lowering of rates.
Reassuring.
The other was the reassurins.
statement in the commissions decis-
| ion that So per cent on. property
value was to be considered the mini
| mum for railway earnings, the infer
ence from which was that, If the new
| schedules failed 10 produce this rev
enue an~appeal for an increase would
/ he readily received Operating in
| comes large enough to return 81 per
/ cent on property value would be
large enough to maintain present
| dividends. and this was the aspect of
| the matter which evidently impress
(; ed the financial community most to-
| day.
| stocks Move Up.
Some of the rails, particularly Chi
| cago & Alton common and preferred
/ (Nickel Plate). Wabash common and
second preferred continued TO
strengthen in the early dealings. but
| the more representative rails became
| reactionary.
! independent Steels were hesitant
| on denial of reports that merger, ne
! gotiauons were approaching compile
| ton, although Crucible, Republic and
| Pennsylvania. Seaooard Were conspic-
| uously strong
Equipments were featured by Lima
| Locomotive. which rose points.
Foreign OILS came forward with the
! domestic group later on heavy Buying
/ of Mexican Petroleum and General
Asphalt
Shippings strengthened and the
| list Of higher specialties and utilities
| included American Tobacco. Tobacco
Products. Industrial Alcohol. Allied
/ Chemical. North American and Brook
| lyn Union Gas.
Call money opened at per cent
Tobacco Stocks.
1t has usually been the policy of
those conducting market moves in
| the tobacco stocks to bend their en-
ergies to one member of the group at
! time. Retail Stores led the way
| several weeks ago, then came To-
American Tobaccos that were taken
up. The incentive in their case was
( the high investment return. Even at
present prices the yield on the old
1 common Is over 3 per cent ana on the
B stock nearly S% Per cent To-
! bacco Products preferred again at
! tracted attention, completing an ad-
\ vance of 10 points within the last
two weeks.
/ The market. having stood the test
\ of extensive profit-taking pretty well
during the morning, pools and specula-
; tive Interests were encouraged to mark
| UP their. fayoriteS again. The bulls
! riveted their attention on the high
] priced steels, and investment indus
| trials. Eastern railroad shares gave a
better account of themselves, making
up about all they had lost in the fore
! noon Lima Locomotive advanced 6
points. the preferred AK; Brooklyn
Union Gas, ~: Barnsdall A, 3ik New
York. Chicago and ST. Louis first pre-
ferred, 81 Crucible and Gulf SteeIs.
"a United Retail Stores and Steel
Tube preferred, 2 Y, and URted Drug,
Republic Motor and Cluett-Peabody,
i1sx: