Evening star., 1923-12-08
Presidents Message Pleasing
To Railroad Stockholders
His 'Fair Return' Statement Held to In
prOUe OutlOOk--Fear of Radical Legis-
latiOn Disappears---Market Active.

are now. The difference is altogether
too great to be accounted for by the
higher return expected these days
upon invested capital 1t has been
explained all along on the ground
that the railroads in recent years
have come too much under the thumb
of government for their future In
vestment status to be looked upon
specifically. Wall street has been
suspicious of the rails because it
rates. and CD forced linking up
of the stronger with the weaker roads,
to the detriment of the former.
Unensiness Removed for Present.
These causes of uneasiness have
been removed for the present If the
President. as must be believed, fs to
stand firmly by the principles he has
laid down. He has said % that no
rate adjustment can occur which will
invested. He has recommended CD
that in carrying. out railway combi-
nations impartial committees be ap-
pointed which will arrange that the
exchange of old securities for new
will be accomplished while avoiding
any contiscation and preserving fair
values"
Thus on the two important matters
conf onting investors in railway Sc
curiticS there has come reinsurance.
The present administration intends
ing there may he of the rate struc-
tUre and whatever regional CONSOLE
dations may he put through, nothing
is to be taken away from legitimate
values. Any leEisla tion TO the con-
trary the Chief Executive. has de-
clared to he confsratory and pre-
Sumably could not be passed except
over his veto. which is wholly incon-
ce.vable.
Outcome Of British Election.
From the American commercial
standpoint the British election re-
suits We're satisfactory. What the
effects of an English protective tariff
would have been is more or less ques-
tionable. But 1t would have certainly
made more difficult the already ar
duous problem of how to dispose Of
our surplus food products, and it
would have made II much harder for
our manufacturers to compete against
the British colonies in the English
market. lnasmuCh as we depend
upon Great Britain for some % per
cent OF our export trade, 1t Will be
seen that there was much at stake
for Americas foreign commerce in
last Thursdays elections.
Germany stIIl Has Buying Power.
The October trade figures have
demonstrated even more conclusiveIy
than those for September the fallacy
or the notion that collapse of Euro
buying power. The German mark.
virtually worthless at home. is en-
trely worthless abroad. Yet Ger
many bought from US in October
S6.300.000 more than it did in tho
same month in 1921, when the mark
had fairly stable valuation around
n half cent. When it is asked how
Germany can afford to buy, rs it
did the month before last, 81 ,0o0. 900
more from than it sold TO the United
- az he
the first place, Germany still has
gold reserves to pay for foodstuffs
and raw materials In October it
sent more than 100000 gold to
this country.
In the second place, it has large
credits built up on this side of the
water since the war, to draw upon.
! FINALLY as partial offset TO the un-
favorable balance in the visible trade
is the invisible item of the large re-
mfttances Of the German element over
here to their people in the fatherland.
Europe Heavy Buyer of Bonds
Emphasis is continually laid upon
the increasing disposition of Euro
pean capital to convert into dollar
credits and dollar securities. This is
given. and doubtless correctly, as a
prime reason for the weakness in the
European exchanges People have
been selling these foreign currencies
and buying American money AT the
same time all authorities agree that
Europe has been a heavy buyer for a
long time in the American bond mar
ket and more recently in the stock
market. Instead of the recurring
crises" abroad having an unpleasant
effect over here, they have quite the
opposite, for each occasion which
made the European outlook seem more
uncertain has stimulated the desire
on the part of European capitalists
to buy American securities.
uCopvright 1923