Evening star., 1927-03-13
PRICES IN STOCKS
ON UPWARD TREND
Market in General Takes
Hopeful View - Industrial
Progress Assigned Cause.
Special Dispatch to The star.

Special Dispatch to The star
NEW YORK. March 12.-The mp
ward movement has been predonl
enant in the stock market this week
IL was more pronounced ON the ran
way group but the lndustriais gained
also. The exceptions in the latter
class can he explained by conditions
applicabl 10 individual companies
Taking the market as whole IL mas
presented much more confident ap-
pearance than in the preceding week
There were TWO reasons Tor thlS
Strengthening of faith. One was the
signs of business Improvement IN Ger
tain industries and the other was the
stimulus Ia speculative imagination
from the proposals of the secretary
of the treasury for refunding the pub
lie debt Probably the last named
was the more influential of the two.
Federal Financing Factor.
When the financial head of the
government decided that this was the
proper time To attempt such an I'M
portant piece of financing as the sub
stitution for the second liberty loan
of new five.year Treasury note,
carrying a 315 per cent coupon com
pared with the 4h per cent rate the
place. the inference drawn by the
financial community was that the
ease in money was destined TO con
tinue for long time TO come.
Whether the logic is sound or not,
the result was immediate. Convinced
that there was no prospect of credit
conditions proving bar, speculation
for the rise was resumed.
Coa.a., Dasle nc aodapS
Selection of season dividend-paying
railroad shares for the leaders was
what would have been expected if in
vestment considerations were to rule.
1t is easier to defend higher prices
for railroad stocks than for the gen
eral run of industrials. Except only
in the low-priced so-called merger is
sues there has been no excessive bid
ding up of prices for railroad shares.
Even if traffic does fall off somewhat
In 1927 from that of 1926. earnings
could easily maintain the present av.
erage dividend level or even raise it,
The equities behind the stocks of
the larger and more prosperous sys-
tems are not overvalued in the mar
ket soft coal strike If it comes
will injure some roads, but will help
others. In any long range appraisal
of the railway outlook it may be ig-
nored. Perhaps the most encourag'
ing feature was that this week, un-
like earlier in the year, the chief at
tention was paid TO intrinsic merit
instead of to the benefits, real OF
imagined, that might come from con.
SolidationS.
Money Abundant.
If il is correct to say that the
money outlook was responsible for the
renewal of the advance in stocks. ii
follows that any change in money
conditions would be reflected in stock
prices. The average speculator,
however. is willing to cross that
bridge when he comes to 1t, and prob
ably from his standpoint that is the
proper attitude.
Meanwhile there is no indication ot
any hardening in money. Some dis
turbance is possible incident to the
Governments quarterly financing, but
that, viii be temporary. The maiT
thing is that gold is still coming in
not in as large quantities as earlier
in the year, but still enough TO de
serve notice. The weekly statement
of the Federal Reserve Banks re
vealed that total gold holdings of the
system were at the highest figure OF
the year to date If there is to be
any important demand upon our
hoard, it does not yet appear from
what source ii is TO come.
Business Situation Uneven.
Turning now to the business situa.
tfon. any forecast is more hazardous.
Dunns weekly review speaks of a
'scontinuance of uneven commercial
conditions but of "a favorable
trend"
The same authority points out the
enlarging demand for steel, improve
nent in textiles, particularly cotton