Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-02-13
BY GEORGE T. HUGHES.

NEW YORK, February 12.-At the
close of the most interesting week in
the stock market this year. a week
marked by the elimination of an ex-
cited speculation in the so-called merg-
err railway stocks and it's subsequent
collapse, one fact stood out impress
sively, and that was the ability of the
general list to stand up mistaken by
the excuses i'm a single group.
The test was met more successfully
than even the most optimistic would
have predicted. 1t has been the his
tory of similar Incidents in the last
two years, notably the breakdown at
one time of the unrestrained specula-
ton in the utilities, and at another
time in the motors, that liquidation on
a large scale followed all through the
market. Recovery came only after a
cleansing process that lasted not for
days. but for weeks. There was moth.
ing of the kind this week.
Northern Pacific Corner Recalled.
The trial was all the more severe
in that the violent rise in Wheeling
and Lake Erie. consequent upon the
withdrawal from the market of the
shares bought for the account of three
large systems and the frantic struggle
of the short sellers to eXtricate them
selves from their position, recalls the
classic story of the Northern Pacific
corner and the panic that followed.
The two incidents were not really
similar. but there was just sufficient
resemblance to inspire nervousness.
And yet on the day the stocks of the
two roads which had been the object
of buying by the New York Central.
the Nickel Plate and the Baltimore
and Ohio came down so abruptly
carrying with them the shares of
other low-priced carriers that had
been bid up without any such reason.
the standard dividend-paying rails
and industrials closed with only minor
net changes, and on the two follow
ing days these seasoned semi-invest-
ment issues turned the market about.
1t would be going too far to say
that these happenings forecast any
resumption of the advance in the en-.
tire market. AS matter of fact. at
the close of the week it was only
the seasoned dividend-paying rails
that showed marked gains over their
quotations of seven days ago. There
has been little change In the motors
or in the bulk of industrials. The
future is dependent upon trade deve'
lopments which it is difficult to fore
see at this time.
Investment Support Strong.
The fact remains, however, that
operations for the decline have been
counteracted by an investment sup
port which is the real bulwark OF
the market under present money con
ditions. 1t is logical that high grade
railroad stocks should show greater
resistance that corresponding indus
trials or even utilities. Whatever
doubts there may be about conditions
in various lines of trade, there has
been no falling off in railroad earn
ings that would create any uneasiness
about the present dividend scale. Com
parison with the utilities brings out
the point also that the relation Oh
earnings per share to market price
leaves the greater possibilities of i'm
provement with the railroad shares:
The most important trade news OF
the week was the untitled tonnage
statement of the United States Steel
CORPORATION. 1t revealed decrease
larger than had been generally anticI-
pated. The loss on the month was
100 900 tons and the total was more
than 1000, 900 tons below that of jan
nary. 1926. AS a market factor these
seemingly unfavorable figures. how
ever. were ignored. Wall Street Is be-
ginning to accept what the leaders in
the industry have long been saying,
namely, that in these days or hano-to'