Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-12-03
INVESTMENT MARKET IRREGULAR
WITHLARGE BLOCKS OF OFFERINGS
LEFT WITHBANkERS, SAYS SELLERS

not due TO any indication of Il
change in the business trend, but
rather to concern over the program
in Washington. This was particu-
larly true of railroad securities and
especially Of those the position of
which had appeared to the dubious of
late. The weakness in Erie stocks
and bonds this week is a case in
point. st. Paul's inability to show
fixed charges covered. and the poor
earnings statements of such roads as
the Seaboard and the Chicago Great
Western made their securities es-
pecially sensitive to threats of ad-
verse legislation. To a less degree
the condition of roads which SUI
fered so heavily during the strike,
such as Baltimore 4 Ohio.
There were on new developments IN
Washington to account for the great
er confidence shown by investors. It.
is true that the administration appar-
emily plans to forestall the most radi-
cal measures by compromises of its
own. But the program OF the pros
gressives so-called. and of the agri-
cultural bloc remains unchanged. They
insist on a reduction in railway rates.
which. without corresponding savings
in expenses, must result in difficulty
TO use a mild term. for the roads
whose bonds are eIassed as specuia-
tive. The best that can be said is that
in all probability action along these
lines is Il long way ahead.
Il is obvious that 10 buy or build
cars capital must ne supplied. Such
purchases as have been made of iaFe
years have been almost entirely r.
nanced by the sale of equipment trust
certificates. Such certificates are uni-
y~ersally acknowledged to the very high
grade securities in as much as title
10 the equipment remains in the name
Of the trustees until it is entirely paid
for. More over. ever when the road
went into the hands of IL receiver in.
terest on equipment trust certificates
ranked ahead of or on Il par with that
on first mortgage bonds.
Car Purchases
The constant finincing OF car pur-
chases III this way, however, has,
steadily increased the amount of fl
nanced charges and SO has detructed5.
from the standing of junior mortgage
bonds. But If the railroads are n0. 10
he allowed earnings sufficient 10 sell
junior securities this process Of piling
fixed charges on fixed charges must
be continued TO the danger point.
Something may be accomplished by
increased efficiency III operations
How much, though. is a matter OF
opinion, and there is 4 sharp difference
here between the spokesman for the
farmer and for the railroads. Few So
SO far as to suggest that government
ownership and operation is the way
out,
undisturbed by fluctuations in Sc
c~urities. however. the business trend
continues upward. The outlook for the
holiday trade is good. The autome-
bile industry enters December with all
records for production broken. Re-
turns for the II months of 1922 are
expected to show an output of cars
and trucks greater than that of 1920
which was the banner year up TO that
time. The automobile manufacturers
are looking forward confidently 10
1928. but cautiously as well. The dan
ger to ~inadeeuately financed and small
or organizations from intense compe-
tition is fully realized.
Abroad the situation. while no bet
ter, is certainly no worse. Important
developments are looked for at any
time. In our market foreign bonds
have either held firm around last
weeks levels or they nave advanced.
The fact that London bankers are able
to offer better terms for "A new loan
to the city of Bergen is indicative OF
more confidence as well as easier
money in that market at least.