The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1928-10-06
R. R. GAINS SOAR
IN HARVEST
TIME
By w. S. COUSINS,
International News Service Financial

By w. s. COUSINS,
international News Service Financial
NEW YORK, Oct. Sin an in
teresting statistical study CT the
movement of railroad stock prices
over period of years. the Stand
ard Statistics Company has shown
that in eight out of the last 81
years the annual highs" were made
In January. following two or three
months of accumulation in the fall
OF the preceding year.
This is interesting in view of the
current buying activity in num-
Der OF high grade railroad shares
which have always. been considered
as the leaders in the security mar
kets. 1t points to the logical ecu
mutation of the rail shares on the
eve of the harvest season, the period
of largest earnings for the trans
portation systems.
Records i'm January
Between the years 1897 and 1928,
according to the statistical review
referred to, 20 representative rail
shares recorded their years high
price in January of the following
years: 1908. 1906. 1907, 1910, 1913,
4S14. 1917 ana 1871.
The December month also hollis
q good record, with the same stocks
at their peaks in 1898, 1900, 1904,
1905. 1908, 1924, and 1925. Thus
in December and January about so
per cent of the high records We're
made while the remaining 10 months
shared the other so per cent.
February and June were entirely
bare of high price records. March
held only one; April one. May two.
September four, October and No
vember three each. 1t is also sig
nificant that in the five months
lying directly ahead, September to
January inclusive. the rail stocks
reached their peak prices in % out
Of the 81 years. while in that part
Of the year already passed the
high-price peaks were passed only
six times or less than 20 per cent
of the time.
Stocks Up In Fall
These facts being well known
and appreciated by shrewd traders
1t is not difficult to understand
why the railroad stocks meet with
their best public reception in the
fall of the year, when the harvests
are being gathered and freight is
moving over the transportation lines
in greatest volume.
Traffic over the American rail-
roads was in disappointing volume
in the first part of this year. but
conditions have improved materially
since July, and the recent improve
ment in crop prospects has mate
rally frightened the outlook for
the so-called granger roads
There has been large reduction
in the stocks of bituminous coal
and the roads in the coal mining
territory must materially increase
their loads in the fall season. while
the sharp gain in cotton production
viii provide heavier traffic for the
southern roads.
Earnings Suffer
Earning capacities OF many OF
the leading roads have been some
what handicapped this year by
wage increases. but improving
operating efficiency has Offset the
efforts of the higher pay-rolls.
That being the case, the railroad
heads are hopeful that the antici.
pated wage raises on the western
lines will he covered in the same
way. Incidentally the roads have
ESCNtfSu a modest pIum IN the
form Of a small increase in msil
paw.
Bulls in the railroad stocks have
the satisfaction of knowing that
the speculative excuses that have
visited other sections of the stock
market have not impaired the tech
meal position of the rails.
Noted Rails Down
New York Central. Baltimore and
Ohio, Southern Railway, Nickel
Plate, Great Northern, Northern
Pacific. Southern Pacific and other
prime investment rails are down
from 10 to rs points from the high
of the year and in a position to re.
spond with higher prices to ex-
panding operations. increased earn
ings and enlarged speculative de
mand for their stocks.
From the investment standpoint
IT is significant that the rails re-
turn close to per cent on the in
vestment. while industrials range
from less than per cent to per
cent or better. The rails therefore
have an investment appeal which
will steady them when the specuIa-
tive cyclones force a retreat to the
storm cellars for holders of the
high flying specislties.