Evening star., 1923-12-15
BIT ROGER w. BABsON.

Special Dispatch to The Star
WELLESLEY HILLS. Mass, De.
cember 1.-THE recovery in busines:
conditions early this year, combined
with increasing prosperity of the
railroads. has brought unusual ac-
tivity into equipment lines. The
ss23,o00,000 program instituted was
pretty well followed out. Increased
efficiency of operation, combined with
large deliveries of rolling stock, have
permitted the railroads to handle the
record car loadings of 1928 without
difficulty.
Repair Goal Passed.
Last April the car service division
of the American Railway Association
set up goal for the railroads tC
meet by October; namely, reduction
of bad-order cars to 8 per cent and OF
locomotives awaiting heavy repairs to IL
per cent. The mark was passed
shortly before the time designated
The result of this situation. together
with heavy deliveries of new rolling
stock and Increased efficiency of OPP
Grafton generally, has been seen in
ability to pass through a period OF
record car loadings with surplus in
stead of the customary shortage OF
cars.
In recent estimate the United
States Chamber of Commerce set 4
figure of S7,S75,000000 as the pos
sible equipment program for the
next ten years. This gives an an
nual average substantially below that
of the year just past even without
consideration of probable growth OF
the country and transportation needs
during the period mentioned.
Big Points i'm Industry.
There are a number of important
points to remember in connection
with the equipment industry:
G) The Increased prosperity Of the
railroads has made possible very
heavy equipment buying, with the re
sut that any acute shortage has been
fairly well rectitied.
CD More efficient repairing has re-
duced "bad-order" cars to mini
mum. Larger percentage than ever
before is available for regular duty.
t3) Tendency toward greater eff
cheney of operation, or, in other
words. increased car miles, tends to
cut down needs in this respect.
tD Business conditions are not
sufficiently promising for the imme-
oiiate future to indicate any equip
ment needs comparable to those eX-
listing at this time a year ago. Gen
eral business. as reflected on the
Babson chart. is now running per
cent below normal.
Predicts Slucken1nE DEMAND.
Under the conditions outlined
equipment companies must look for
a Slackening of demand. Those rail-
roads which are able to exceed 6 per
cent return on total bonds and stocks,
the amount permitted under the
transportation act of 1920, before con-
sideration is given to the so-called
recapture clause of that act. may
logically be disposed to place con-
siderable portion of the excess in
maintenance and equipment This is
not, however, a factor that should
loom large in the 1924 situation.
The possible desires in this direc-
ton will be checked by recognition
OF the abnormal equipment program
which has been enforced this year
and the relative business needs of the
ruture.
Outlook for Stocks.
There is nothing in the immediate
8 tuation in respect 10 stocks OF the
companies concerned which sets them
apart from the stock market as Il
whole. The various issues listed on
the exchange have shown a very diff
ferent price trend than that of the
general market. Contrary to the av-
erage of industrial securities, the
equipments sold at far higher levels