Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-12-11
RAILS TAKE SLUMP
/ ON COURT FINDING
Final Quotations IrreguIarIy
Lower After a Strong
Opening.
By the Associated Press

By the Associated Press,
NEW YORK, December 10.-An al
verse Federal Court decision against
the St. Louis & O'Fallon Railroad in
valuation proceedings, under the re
cature clause" of the transportation
act. brought about heavy liquidation
OF the railroad shares in today's stock
market This brought 10 an abrupt
halt an impressive rally which had
carried prices up l to ; points and
lifted more than score issues TO new
peak prices for the year or longer
Final quotations were irregularly low
er. 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 suit
ficiently corrected the weakened teen
nical position Of the market. Pools.
feeling more confident that no imme-
date credit stringency was in store,
started to bid up stocks in all sections
OF the list. Covering operations o.
bear" traders stimulated the advance
until the O'Fallon decision came out,
and then there was heavy selling
again for both accounts.
Repeal of Decision Discussed.
While Wall Streets initial response
to the O'Fallon decision was unfavor.
able there was a rather general feel
ing in banking and railroad circles
that the ST. Louis decision would be
repealed and eventually carried 10 the
United States Supreme Court with
the possibility Of final determination
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-prlced
stocks of weaker roads which should
benefit if the disputed clause OF the
transportation act is upheld.
Southern Pacific had been lifted 70
1868, the highest price since 1910. but
the stock sank to 1924 and then raj
lied TO 124, off is net. Recent accu-
mutation of this issue has been basel
on the confident belief that the an
nlal dividend would be increased to
81 next year Delaware & Hudson
dropped from 191 to 1856 and then
moved back to 1871 New York Cen
trail reacted from 1884, TO 1901 and
rallied to 1911 y. Atchison fell from
1881 TO 1872 and snapped back to 1873
with similar declines and recoveries
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
wear as low as 29L. attained 4 record
high level at 1898 in the first hour.
broke to 1171& and rallied to 1874, of
l5s net. Excited speculation in this
issue has been based on the reported
discovery on its Colorado properties
OF one of the richest ore bodies in the
world. United States Steel common
rallied points above yesterdays low
to IA and then sold off to 14l7s, I'M
changed on the day Radio dropped
from SSA to S5ll. closing slightly
above that level for a net loss of rs
REYNOLDS Spring responded to reports
OF increasing earnings by touching
a new high record at IS, 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 & Williams, Freeport Texas, Nc
Crory Stores preferred. Reid Ice
Cream, Porto Rican Tobacco B and
Wright Aeronautical.
Foreign Exchanges Steady.
Foreign exchanges held steady in
quiet trading. demand sterling ruling
just under 81 So.
The weekly clearing house state.
ment showed excess reserve of SlB,-
1850, as against a deficit in reserve
OF S5,435.40O a week ago. Aggregate
reserve totaled $681, 72S. 600 The de-
tailed statement of actual condition
this day showed mixed changes.
Loans, discounts and investments
dropped $62, 523 900; net demand de-
posts. $22.O47 900. and time deposits,
$30.064 900 Cash in own vaults in
creased $4,893, zoo, and reserve in the
Federal Reserve Bank Of member
ranks S1A 073 600,