Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-12-02
TRADING IN STOCKS
CONTINUES ACTIVE
Utilities and Rails Follow
Industrial Shares in Spec
uIative Move.
BY CHARLES F. SPEARE.

d,
nation of events some new, some pre-
Sented in a more seaSonahle dress, has
served this week to stimulate specula-
ton in stocks and to produce market of
greater breadth ana intensity than any
heretofore witnessed.
The proportions of trading on the
New York Stock Exchange. big as they
are, do not indicate all that is taking
place in stock dealings throughout the
country. Nor do those of the Rev
York Curb. in which daily transactions
have reached 100000 shares. Every
local exchange IN the United States is
seething.
Sales on the Chicago Exchange last
week were six times greater than In
the corresponding week in 1927. The
par value of stocks dealt in on the san
Francisco Exchange was more than
double that of year ago. and in Los
Angeles nearly four times larger. So,
while the appreciation in the market
value of securities on the big board
last month would have twice covered
the total United States debt prior TO
the war there was. in addition, an
enhancement in local securities by a
very substantial amount.
Unlisted Stocks Active.
The scope of the buying movement
goes even beyond the official exchanges,
for there are hundreds of unlisted
stocks In every active market center
that are playing their little part in
each days business. The additions to
this supply of securities in the last
three months have been enormous, as
recourse to stock instead of bond flnanc-
ing has been found necessary in order
to meet the requirements Of investors
who are no longer content with safety
ana per cent"
Among the incidents promoting a
wider and a more confident buying of
securities have been increased dividends.
extra dividends, additional rights to
subscribe to popular shares. rumored
consultations. the complacent attitude
of leading bankers toward the stock
market, which they were discreditirg
six months ago, and the expectation of
some constructive action by the Con-
gTeSS which convenes next week, as
well as suggestions for the relief of GER
tain economic ills in our national life
locked for in the Presidents message.
With the recent addition of railroads
and public utility shares to the list OF
those in which speculation has been
rampant, the market has completely
rounded itself out. although it is still
unbalanced in the direction of too high
an average for industrials compared
with the average of these other two
important bodies of stocks. One by
che the laggards have come into line.
first the ceppers. next the oils and now
the shares of the great transportation
and electric light and power companies
If there is market slack to be taken up
ii is in the way of establishing parity
between the yield on the so-called in
vestment rails and the investment In
dustrialS.
Money Conditions Ignored.
In neither group, industrials or rails,
nor in that of the public utilities, is
there any apparent consideration being
given to the existing money situation.
This week we have had return TO
the extremely high rate on call which
first appeared in July and was repeated
In the early part of October and which
might have been expected to cast
chill over the market. High money,
however. seems to be a tonic to specu-
lation this year. If these higher rates
are having the effect of discouraging
those compelled to absorb them, such
effect is not noticeable.
Bankers have been for six months
repeating the statement that the
rect itself" Except for the decrease
in member bank rediscounts with the
Federal Reserve system there is not the
slightest evidence that correction has
taken place or that 1t Is in sight. 1t
is certainly a remarkable situation
when money markets in the country of
the greatest gold supply in the world,
of the largest individual bank deposits,
and with a credit balance that is the
despair Of all Europe, should be quot
ing money rates twice as high as those
Of London and Paris. higher than those
Of Berlin and as high as those of ma
tions whose bonds can not find buyers
IN New York except at a prohibitive
discount to the would-be borrower.
Dealing specifically with the railroad
stocks, which have finally found place
In the speculative arena, the legitimate
basis for their advance is the splendid
recovery both in gross and net earnings
that has followed the poor results of
the first half of the year. These earn
tngs have already prompted the di-
rectors of the Chicago & Northwestern
and the New York, New Haven az Hart
ford to more liberal dividend policy.
As November and December revenues
are also likely to show substantial gains
over last year. 1t is not unlikely that
HtIlBI CARRIERS VIII Dc lflCltI1Su UD eIhlB
q larger proportion of their profits with
stockholders. as they may we'll do. for
the experience of the past seven years
should by this time have taught rail-
road managers that they have no better
standing with State commissions or
with the Interstate Commerce Commits
sion and are no less subject to rate re-
auctions when they pay reasonable
dividend in proportion to earnings on
stocks than under the ultra conservative
policy of using large proportion OF
earnings in property investment.
The New Haven has probably gone
zoe far in the direction of the dividend
policy of the industrials in paying out
two-thirds of its current earnings. On
the other hand, railroad stockholders
have a right to complain when they
receive and s per cent dividend on
stocks that are earning from 10 TO IL
per cent, with even better prospects in
sight.
Utilities Reflect Confidence.
It is perhaps not necessary to ex-
plain the last rise in the public utility
shares by other than the confidence in
fair treatment Of public service cor
porations during Mr.. Hoovers admins
trstion. In addition to this, there are
large projects under way for the intense
Development of electric properties in
the great metropolitan district of the
country. These have been limited at in
this weeks rise in the stocks of Con-
solidsted Gas, Brooklyn Union Gas,
Public Service Of New Jersey, People s
Gas and Detroit Edison, rs we'll as in
those Of the California companies.
experimenting these proposed develop
ments in their effect on prices has been
the formation recently OF large num-
kAeF ~ aAvaf EnnC1t1C2lIV
dealing in public utility securities and
taking out of the market substantial
blocks of high-grade stock of this par
tcular group.
The danger of overplaying the
favorable factors in the business situa-
ton and Of exaggerating the Importance
Of them. as well as the temptation IN