Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-04-09
BY CHARLES F. sPEARE.
Special Disoatch to The star.

! Special Diso3teh to The Star.
! NEW YORK. April Sit is neces-
sary to go back into financial history
some 90 years to find conditions
paralelling those of this week, and to
! the time just before the war for an
| equivalent OF the average price now
| prevailing for stocks and bonds.
/ High as railroad securities now
! seem to be when compared with the
| l921.1e22 period, they still are many
, dollars per share under the levels OF
/ 1905-1906, when the great Hartman
| bull market was in progress. A few
| quotations from the records of those
times are worth reprinting.
New York Central, which sold this
week about $50 and now pays per
cent in dividends, was then 174 with
q per cent dividend. Union Pacific.
now quoted at 173, was about 1875, pay
ing per cent, compared with 10 per
| cent today. Illinois Central. then a
Z per cent stock as now. was about
| 1856, or So points above the present
price. Baltimore & Ohio had just in
augurated a 6 per cent dividend on
its common stock. which was selling
above 125 compared with 116 today,
and Pennsylvania was about to raise
its rate to per cent, where ii now
stands, and it's price was the present
equivalent of IA, against the current
quotation of 62.
Due to the extra disbursement which
Mr.. HiH was making, his Great North
ern stock was selling close to $50
against IS now, and Northern Pacific
above $50. compared with 81 at pres
ent, both paying Z per cent. They
have since reduced their dividends to
per cent. Even Erie common was
quoted then nearly as high as 1t has
been this week with dividends being
paid on Erie preferred shares.
Danger Signals Are Set.
If we take the prevailing average
Of stock prices and compare it with
this time of the year In 1922, when
the investment and speculative mar
kets had just begun to recover from
| the commercial collapse of 192021, we
| find that there has been an advance
of So points. over half of this, or
| As points, has been added since the
| end of March, 1925. OF these as
| points, 20 were added in the last
three months. This indicates the
| swiftness of the approach of the gen
eral market to a. level where it should
| impose caution on the part of those
WIZ HOIu speculative SlldIcS anu OLIlSIS
who have been aroused to make pur-
chases through the excitement and
publicity given to this weeks markets.
| While the stock average today is at
| the highest of the after-war period,
commodity prices are lower than they
have been since the Autumn of 1925.
! The decline in commodities is most
visible in breadstuffs, textiles, build
ing materials, live stock, provisions,
metals, coal and oil--in other words,
| in those things most necessary to
| daily life. There is a direct relation.
| ship between tho movements of COM
nlodities and fixed interest bearing
| securities. A decline in commodities
| brings an advance in bonds. 1t does
not follow, however, that because
| commodities are falling stocks may
not continue to rise reasonably.
Price Movements Not Uniform.
Bonds have been rising naturally
and moderately in comparison with
| the unusual advantages that the In
vestment market has enjoyed from
abundant capital. At the end Of two
| and one-half years following Mr.. Cool.