San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1924-03-30
Spectators Pessimistic
While Investment View
Is Optimistic.
RAILS FEATURE TRADE
Norfolk and Western Near
ly on Par With High
Grade Issues.
By BYRON SELLER.

Ds DAAhOAN SISLLEhs
Copysght. 1894. by Corsol. Press AaSu.
New. York. March 28.-Jpdging
from the course of the markets this
week. Investment and speculative
opinions as to the future are wide
apart. Spectators generally are
pessimistic. They put all the en-
phasis upon evidences of a let-up in
trade. notably in textile and steel In
dustries. They profess to be dubious
about the outlook for the motor car
manufacturers. They point to thu
decline in the stock market as con-
firming their view. They see over.
production in masg quarters. Politi-
cal developments are a drug upon
business in their opinion and SO pro-
fessionals have been selling stocks.
which they did not own, but which.
they hoped TO buy back at Q lower
price later on.
The investment view il Just the
opposite. All that the SPECTATOR
says about reaction in certain lines
is admitted TO have some founda-
ton but its Importance is declared,
TO be exaggerated. They do not
regard present tendencies in specu-
lative circles as forecasting any gen.
eral depression. On the other hand
they argue that nothing could be more
! renssuring than the almost universal
caution shown by retail merchants
and consumers alike. The complete
ab. ence of over-stocking and the
hand-to-mouth buying is certain in.
surance against any abrupt decline
in general trade.
Investors Are Optimistic.
I'm the positive side, there is the
abundance of capital seeking employ
ment and the conviction that the con-
sumptive needs of the country are as
large. il not larger, than ever before
and not having been anticipated,
must continue TO make themselves
felt steadily. The Spectator, ignor-
ing the fluctuations in the specula-
tive markets has been all this week
ready buyer of middle grade securi--
ties
Two Roads Feature Rail Issues.
SO much for the general market,
As to the railroads the most interest ]
ing movement of the week in which
speculative and investment interest
nike manifested itself was in the
securities of two roads. In bonds IL
WIS st. Paul issues that attracted at
tention and in stocks it was Norfolk
and Western. For some months now
sentiment toward the st. Paul has
been more favorable. Recently there
has been reports unofficial and I'M
confirmed, that consideration OF re-
funding % the st. Paul's maturities
next year had been taken up. When
TO these reports was added this week
a February earning statement show
ing the largest gross in four years
mud In .n.r ,n vaf
there was immediate response in the
bonds.
Rail Consolidation Proposed. 4.
More interesting is the case of the
Norfolk and Western. Here the stock
had q remarkable rise in response to
the announcement that the Pennsyl--
vania was negotiating for a lease Of
the road. That the Pennsylvania
would guarantee dividends on Nor
folk and Western stock was taken. for
granted. The uncertainty was as to.
the rate aud as to whether or not Q
stock dividend would be declared first.
The important point of all this. is
that. il Is possible now to stimulates
speculative imagination as to the pos
sibilities in railroad consultations
As far as this case is concerned, the
Interstate Commerce Commission has
the last word. Interests OF other
roads must be considered aud the
Baltimore and Ohio has been reported
as objecting to the proposed arrange
ment. Moreover, under the commits
sion's tentative consolidation plan, the
Norfolk aud Western is made the
nucleus of a system of its own. =,
Would Mean Big Deal.
II the lease goes through as plan
ned, it will be the largest deal Of its
kind on record. Many estimates have
been ventured as TO what would be.
the proper market price of a Norfolk
and Western stock guaranteed by the
Pennsylvania. As a rule stocks. divi-r
dends on which are guaranteed by
strong roads, sell on n yield basis COM
parable TO that Of high grade bonds.
The case Of the Norfolk and Western
is not quite comparable TO these high
grade guaranteed stocks because Nor
folk and Western shares come after
large mortgage Indebtedness and the
system is so much more extensive. On
the other hand the roads ability 10
earn handsome returns for its stock
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