San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-02-18
BONDS SHOW!
AN ADVANCE
DURING WEEK
New Issues Taken on a
More Liberal
Scale.
MONEY RATES FlRMER
As High as 6 Per Cent
Quoted for Call
Loans.
MONEY RATES FlRMER
By BYRON SELLER.

By BYRON SELLER.
Special Correspondence Of the s. A. Light
Copyright by the s. A. Light.
New York, Feb. 17.-One Of the
early constructive phases in the in
vestment situation, the movement to-
tward railroad consolidation, has al
ready begun today. This mcvement
will be stimulated by the hearings in
Washington toward the end of the
month, covering the proposed combina-
ton of various transportation groups
in the Northwest, Southwest, Central
West and of the transcontinental
lines.
There are certain we'll defined group
ings which would be to the advantage
of the public and which should lead
to economies benefiting the holder of
railway securities. These are suggest
ed in either the Ripley plan or in
that of the Interstate Commerce Com
mission and with notifications out
to be practicable and workable.
Railroad Relations Defined.
A great impetus has been given to
railroad consultations by the order
of the Interstate Commerce Commits
sion defining the relations of the
Southern Pacific and Union Pacific
to the Central Pacific now owned by
the first named road. but to be given
for use in part to the Union Pacific.
This adjustment was one Of the most
difficult with which the commission
will have to deal. If it has been able
to settle satisfactorily what threaten
ed to be a most disastrous break be-
tween the two Pacific roads, almost
any other situation can be dealt with
practically and to general satisfaction.
The public has the right to be
given a test of consultations as pro-
posed under the transportation act.
Such consOlida lion may not accomplish
in economics and in service what is
predicted for them, but at 1east they
will relieve the carriers of RESPONSE
bilties that are connected with dupli-
cate service and wasteful competition.
No Unifications OF Importance.
1t has been found among industries
that combinations effect great changes
in balance sheets. Witness the recent
mergers of good sized iron and steel
companies with the Bethlehem Steel
Company. An equivalent to this would
be the consolidation of the Chicago,
Rock Island and Pacific with the
Southern Pacific, ole of the suggested
mergers, by the way, and one that
had quite little to do in developing
Union Pacific's desire for Central Pa
cific. However. there have been al
most no railroad consolidation of i'm
portance in recent years.
The purchase by the st. Louis and
San Francisco of the International
Great Northern and by the Nickel
Plate of a control of the Chesapeake
and Ohio represent investment, but
not that kind of merger that is in
timated in the transporta''Cn act.
Evidence has been given in both
the French railway systems of divi-
sion of territory into a group of six
lines covering all OF France and in
Great Britain in the reduction of
railroad units to q half dozen serv-
ing all Of England. that profits are
multiplied as the duplication of effort
is reduced. We may expect to see
on the possibilities Of purchase by one
line of another line and an improve
ment in junior grades of bonds as
the protectOrate of a strong line over
weak one is established.
Money Rates Primer.
The other side of the picture will
be TIE objection Dy holders of sccuri-
ties of a strong line TO taking over
the stocks or bonds of an inferior
road with little ability over an aver
age of years in earning its fixed
charges.
Money rates this week have been
firmer, with as high figure as 6 per
cent quoted for call loans. Rates for
commercial paper were also steady and
in all there was evidence that the
commercial demands were increasing.
Quite n difference of opinion exists
as to the future of loaning rates. Sec
rotary Mellon is quoted as believing
in we'll stabilized commodity and
money market. Wall street banks
which lend to large extent on col
laterals, take the same position.
The important commercial banks of
the East, on the other ham, have the
feeling that rates will be firm through.
out the spring and that the era of
easy money. about which so much was
written last year. may be cOnsidera-
bly, delayed. So far this has not in
iured the position of fixed interest
bearing securities. They have ad-
vanced during the week in line with
stocks, though the emphasis has been
rather on those of the convertible type
than those of the purely mortgage
character.
New issues nave been taken on
more liberal scale and quite well
nlQced. There is a growing DISPOSE
ton to finance with issues o! no mar
value stock. Several promising offer
ings OF this sort have been made late
" and others are TO follow. While
there have been refundings Of high
coupon bonds ~ bonds If moderate
rate, there have also been plenty OF
high grade investments to return bet
ter than per cent. The situation is
full of contradiction md is a lohg
way from being az equilibrium.