Douglas daily dispatch., 1927-12-11

NEW YORK, Dec 10 R.--An adj
verse federal court decision against the
ST. Louis and O'Fallon railroad in val
uation proceedings under the recap
ture clause" of the transportation act,
brought about heavy liquidation of the
railroad shares in today's stock mar
ket. This brought to an abrupt halt
an impressive rally which had carried
prices up to points, and lifted more
than score issues to new peak prices
for the year, or longer. Final quota
tionS were irregularly lower, with
many of the high grade rails showing
net declines Of / to points.
Early buying was based on the be-
lief that the recent reaction had Suf-
ficiently corrected the weakened tech
nical position of the market. Pools.
feeling more confident that no inn
mediate credit Stringency was in store,
started to bid up stocks in all sections
of the list. Covering operations of
''bear" traders stimulated the advance
until the OFallon decision came out
and then there was heavy selling
again for both accounts.
with the possibility of a final de-
termination of the case months away,
selling of the rails embraced both the
high grade investment issues, whose
excess earnings are likely to be shared
with the government, and the low
priced stocks of weaker roads which
should benefit if the disputed clause
of the transportation act is upheld.
Southern Pacific had been lifted to
1865, the highest price since 1910, but
the stock sank to 1884 and then raj
lied to 124, off 15s net. Recent ac-
emulation of this issue has been based
on the confident belief that the an
nuaI dividend would be increased to
81 next year. Delaware and Hudson
dropped from 191 to 1856 and then
moved back to 1879, New York Cen
tral reacted from 1882 to 1904 and
rallied to 1914, Atchison fell from
1853 to 1872 and snapped back to 1913,
with similar declines and recoverleS
throughout the railroad list.
InduStrialS, which were in the fore
front Of the early advance, yielded with
the railroad shares. Greene Cananea
Copper, which sold early this year as
low as 29A attained record high
level at 1885, in the first hour, broke
to 117A and rallied to 119%, off rs
net. Excited speculation in this issue
has been based on the reported dis
covery on it's Mexico properties OF
one of the richest ore bodies in the
world. u. S. Steel, common, rallied 6
points above yesterdays low to. LA and
then sold off to 1417s, unchanged on
the day. Radio dropped from 88% to
85A, closing slightly above that level
for net loss of 25s.
Reynolds Spring responded to re-
ports of increasing earnings by touch
ing new high record at 1S, or more
than three times the years low. Other
stocks to break through to new peak
prices for the year were Nash, Pack
ard, American Steel Foundries, Tran
sue and Williams, Freeport Texas, Me-
Crory Stores, preferred; Reid Ice
Cream, Porto Rican Tobacco B, and
Wright Aeronautical.
Foreign, Exchanges held steady in
quiet trading, demand sterling ruling
just under $4.88.,
The weekly clearing house statement
showed excess reserve of $50, as
against a deficit in reserve of SIS, ,435,-
400 a week ago Aggregate reserve to-
tailed $681 5000. The detailed state
ment of actual conditions this day
showed mixed changes. Loans, dis
counts and investments dropped g.
$4,000; net demand deposits, $22,047,-
600, and time deposits $3O,O64,OOO. Cash
in own vaults increased $4893, 900, and
reserve in the federal reserve bank of
member banks, $19,073,0O0.
" st5sts --L4 ---------------- fst
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