Evening star., 1923-02-04
SECURITIES SHOW
IMPROVED TONE
Constructive Factors Crop
Out Which Will Help High
grade Issues.
WAR DEBT PLAN VITAL
Better Railroad Earnings and
Many New Offerings Improve
Investment Prospects.
By BYRON SELLER,

Special Dispatch to The Star.
NEW YORK, February 3.-The
week has been one that may be
termed constructive for the invest
ment security market. This NAV a;
first appear as a strange conclusion
when the many new low prices for.
foreign government issues are re-
membered, to say nothing of further
reaction in domestic issues of the
hrst and second grade types. The
major influences, however, have been
on the side that ultimately will make
for higher quotations
Take the decision of the Britist
cabinet TO accept the terms of the
American government for funding the
S5,0O0.O00,000 external debt. The CO.
! lateral s well as the direct value o.
this action is great. They enter
more deeply into the whole question
of international politics and econom-
les than is supposed.
1t is possible to translate this ac-
ceptance into terms that ultimately
will comprehend the entire circum
stances of international debts, not
only those which Europe owes ths
United States but which nations OF
Europe owe each other.
1t means u mutual understanding
and respect between the United
States and Great Britain 1t a tims
when their cooperation is essential
to ending the decentralization in con
tinental Europe. For this reason II
is fully as important rs the agree
ment on naval disarmament a year
ago.
Congress sure TO Accept Plan.
1t is impossible to believe that Con-
gress will not support the govern
ment in the proposition. which it has
made and which the British peop@
have adopted. In fact. a survey OF the
situation in Washington suggests ap-
proval of the terms without muc'
! opposition
The second constructive factor is I"
| be found in the series of rallreaC
earnings presented for the month .,
December and completing the recoid
for the 1922 calendar year. rms rec
ord has been a most heartenlng on'.
! 1t shows the natural vitality OF our
great transportation systems anu
their ability to go forward satis1ac-
torily if they are given a 1alr chanCe.
In a num6sr 1n6st of fcHIf WaTf Yea years sine
i1a17-1S in the railroad admlnlstrt-
tion. The rritatiOns were more hu-
merous and more vital. the costs "e'H
higher the efficiency of WorklngmeH
/ lower and the fluctuations of traiii"
more confusing than at any time III
/ the last four Years.
| Splendid Showing by B. and o.
But with it all we see the BaitimoTe
and Ohio. whose loss from the shop
mems strike was S10,000.000 coming
! back strong under the brilliant man
agement of Daniel Willard. and IN
| December earning 200 per cent more
net than in the same month OF lsaI
I and 81 000, 900 more net Tor the year
than in 1921.
| We also see the st. Paul, under
President Byram, increasing net $50
per cent; This temporarily relieved @
may not be earned. The conservative
Northern Pacific, careful to husband
it's resources and promptly reducing
I its dividend when surplus began 10
decline, earned $S.6OO,00O more for IN
jterest and dividends than the year
| lprevious: the Chicago and Northwest
ern earned over S10.000,000 more. and
| the Southern railway gained 40 per
cent net. The New Haven had net
Income of over s12.000.000. compared
with $4,000 the year before.
These are properties whose stock
| holders have shown some concern
| from time 10 time in the past year
and il is therefore satisfactory 70
them and helpful to the entire invest
ment situation that earnings are now
\ recorded In black and not in red. The
story does not end here, as Januar!
net results will also be very gratlfH-
\ ing.
! Relieves Flood of New Securities.
| The third factor of helpfulness IS
| that underwriting syndicates have re-
| lieved the investment market or
; further flood of new securities, ana
1 have thereby given il a chance 10
I catch up with new supplies of capital
| for investment. January has estap-
| lished a record for capital emissions.
Nearly three-quarters of billion dol
liars in private corporation bonds and
stocks and over s300,00o.0 600 of gov
ernment obligations have been offered
/ the public.
1t is small wonder that markets
have been clogged and prices have
1 saeged The same conditions develop
wear after year but not in such de-
| gree as in this year. Distributors OF
[ Securities overestimated the capacity
of investors to take new issues, and
| they underestimated the vital bearing
! of the Ruhr invasion on all invest
1 ment sentiment.
| This latter influence has reduced the
market value of listed foreign gov
ernment. municipal and corporation
bonds approximately 800, 1000. .000. and
4 It has also deprecated values of some
of the best American railroad. indus
| trial and public utility bonds. The
| constructive factor referred to above,
however, ought gradually to change
the aspect of things marketwise, even
more than was apparent in the fairly
buoyant closing of the market for
foreign bonds.
! Copyright, 1928