Evening star., 1928-04-07
LIST BOOMS ALONG
DURING BRIEF WEEK
Stocks Ignore UnfavorabIe
Developments and Prices
Continue to Soar.
BY CHARLES F. SPEARE.
Dispatch 10 The Star.

BY CHARLES F. SPEARE.
Srscial Dispatch TO The Star.
NEW YORK, April THE adven-
ture In speculation in which the Amer
lean public now is irdulging has been
shortened this week by the Easter holi-
days Nevertheless 1t has been carried
on with the oravado that has distin-
guished it fl some time. though at
modified pa. =. Some price records have
been broker since last Saturday. but
the previous cures OF total daily trans |
actions havf. Aot been surpassed.
The publE now operating in stocks |
on margin yTntS a kick" in its market |
performanctk 1t is looking for thrills. |
When Il Sc II the shares Of companies |
with little Background Of earnings or |
business H. M,ompliShment, but with |
great imaglN ry prospects. jumping up,
II follows t&em as il would a dark |
horse" on aNrsce track. This accounts !
for the big turnover and sensational
fluctuations This week in the securities |
az the airplSoe concerns. One of them, |
like Radio, 4as doubled in market value |
this year
II may b that the next generation i
will make as bull market out OF the
shares of fling machines, as this one
has in the *hareS of automobiles. III Is
somewhat premature, however, for the
average meN to invest his savings IN
the securities of a business that so far
has had @Aery little commercial sue
cess. :"
Marksgs Vitality Unshaken.
Nothing .&eems to affect the vitality
of the masket 1t may go along IN
about the present manner for some
weeks. skipping from one group OF
stocks to S@other, extracting all there
is OF possibilities for price advance
ment the ANols abandoning the tavorite
issues of TIE moment as soon as tney
have tranSAsrred their holdings 70 the
public. IL. continues TO be market
where actasl developments play little
part eithert.5or good or III. The specu-
iative talk Is ali in the future tense
The higkASt call and time loans this
week in many months, heavy gold ex-
ports. largtsscommercial borrowings, rec
ORD brokers loans. high price OF wheat,
rejecting anor conditions in the VIM
ter wheat Estates. a tirnid attitude on
the part Of consumers In making pur-
chases ane:the strong opposition on the
administration part TO tax reduction
sufficient ~ help along business re-
vivai, have been passed over as OF
little account while establishing a price
scale at wfAeh popular stocks are whole
sailed to IL public ei1lotionally excited
and lackigtg sound Judgment and
sense Of proportion.
Reterent.e has been made in the past
to the esSe with which new capital
1.@ss
ing the lssst two years and TO indus
trial combinations that have been ef-
fected on tssis basis, though economically
unsound. Another phase Of the same
situation Is the heavy borrowing by
corporatio..s without a great need Tor
new capital, but stimulated by their
bankers irfso making new loans OF stocks
or bonds because money was cheap and
1t was time to prepare for the future.
Surplus Funds In Stock.
Unouestsonably in the total of 81 ,600.-
900. 900 OF domestic corporation loans
in 1927 and In the 81 900 900 900 In the
first three months OF this year. there
was q surplus over actual requirements
for the expansion Of plants or the In
stailation OF new machinery. A con-
siderable portion of this surplus there
fore, has remained either on deposit
in the banks or in the call money mar
ket, or has been employed to purchase
short term securities or stocks that were
believed to have possibilities OF appreci-
alton. When this unusual volume OF
funds is added 10 the supply released
from ordinary channels. one gains an
idea Of why securities are in demand
even at prices that return q very low
income 10 the purchaser.
The gfark Vsnarkaf has dafSn mhnalt
everything 1t could be expected 10 do
with all sorts Of securities except those
OF the railroads and the oil companies
The latter have been acting better for
the past week in spite OF the fact that
the statistical position OF the oil In
duStry improves slowly. There are fire.
Quent periods when the market sud-
denly shows an interest in the rails
For the most part this is centered on
the limited few identified with pros
pective consultations II II Is reason
able TO have industrial stocks at the
highest average In their history In q
period when Industrial profits are un-
satisfactory, competition keener than
ever and important trades facing Il
crisis, due to eVer~changing whims OF
fashion and the new inventions Of the
day, 1t Is also fair To assume that the
securities representing the transporta-
ton industry must eventually take q
more prominent part In the bull market
than they have so far assumed.
Railroad Values Increase.
Aside from the competition with the
automobile there has been no radical
change in the conditions surrounding
the railroads since the last great rise In
their shares between 1903 and 1907.
There have henp narfnda &infp then
when they have faced a crisis in the
way OF political opposition and public
digfaYor This all passed over after
the era OF Government control ending In
1920. No one who has studied indi-
yiduai railroads or the AmericaB system
as whole will deny the statement that
the actual values represented today are
greater than ever and that the equi-
ties behind railroad common stocks are
materially larger than they we're when
some III them sold years ago on a per
cent income basis. There is more
efficient management both In operations
and In financing. While some sections
are receiving rates that are too low on
the average. notably the Northwest.
there is none OF the fate~cuttinR pre-
yaiiing generation ago.
Some railroad stocks, II is true, have
sold higher In the last year than In
the earlier periods of speculation
Among them are Atehison common now
on "A 10 per cent dividend basis, COM
pared with per cent IN 1909, when u
touched i25, and Chesapeake N Ohio
also paying 10 per cent and double the
price of four years ago. New York Cen
trail is another stock that has exceeded
It's previous high record OF 20 years ago
when II sold at about ITS and was pay
ing per cent, compared WIN . per