Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-29
MARKET RESISTING
BEAR|SH PRESSURE
Attacks of Week Fall to Dis
lodge Great Amount
of Stock.
BY CHARLES F. sPEARE.
pecial Dispatch 70 The Star

DA SHARAh1O f. OF 6AhEs
Special Dispatch to The Star.
NEW YORK, December ga week
which includes a national holiday and
is the final one of the year cannot be
expected to develop a strong market
trend, or did the one closing today. It
began with active selling of stocks and
quite large addition to the list of
new lows" dwindled on Tuesday to
the smallest proportion of any session
in 1929. and as the pressure of tax
sales and those of distressed accounts
was lifted, it broadened out and shook
of its earlier bearish aspects. It has
not, however, given a definite clue to
what 1t may do after 1t enters the new
year.
Part of the influences that have been
affecting 1t recently are temporary, such
as higher rates for money and year
end selling for tax purposes and to
reduce inventories of securities.
On the other hand stocks cannot
separate themselves from such concrete
evidences of business recession as are
manifest in the statistics of the iron
and steel trade, the November reports
Of the railroads and the quiet that has
settled down over sections Of the COM
mercial world.
Industry Balances Books.
The next few weeks will be a period
OF balancing of books and casting I'D
accounts for the year. After this has
been completed it will be possible for
the flrst time to approximate the dam
age done to business by the Wall Street
panic and the extent to which the
snrinkages In the last three months of
1929 offset the general appreciation in
earnings OF the first nine months. In
the earlier period analysis shows that
the revenues of selected industrial cor
porationS were about 81 per cent greater
than In the first three quarters Of 1928.
those OF public utilities nearly IA per
cent and Of railroads 80 per cent.
With these gains as a back log and
fundamental conditions so strong, there
are comparatively few prominent Sc
curitieS whose markets should be af-
tected In the future by the threat of
dividend reductions.
Market Ignores Rail Plan.
The most important development this
week was the one that had least mar
ket AFFECT; namely, the publication of a
plan by the Interstate Commerce Com
mission for consolidating the railroads
OF the United States into 10 groups.
The fact that its main features had
been forecast earlier in the month did
not explain the speculative indiffer-
ence to 1t, for the advance information
mad also been received alphabetically.
wall Street knew that the plan was
suggestive and not compulsory: that it
would be opposed In many directions
and could not be put into effect until
Congress had enacted new laws to
govern proposed consultations. More
than this, its most vigorous critics were
members Of the body who formulated
1t and who, in a half-hearted way and
prodded on by public opinion and the
pressure of the administration, had
thrown together a series of mergers
that invite bitter contests and serve
no. economic purpose.
Some systems are to be robbed Of
their favorite offspring: others are to
have incompatible traffic mates, while
a third group gets lines that take it
far beyond its own territory and into
sections Of the country whose entire
economic status Is different from that
in which 1t now operates Some of the
ALLEGATIONS are so weird that one Won
derS II the commission did not find
itself In its planning with a number
Of systems that about fitted nowhere
and so played the child's game Of pin
ming the tail on the donkey.
Absurdities Of the Scheme.
Some of the absurdities of the scheme
are the linking up of the Norfolk &
Western and the Seaboard Air Line
with the Wabash; the ALLEGATION of the
Lackawanna to the Nickel Plate, which
already controls the Erie; the extension
of the Chicago & Northwestern to the
Gulf Of Mexico through the proposed
acquisition Of the Chicago & Eastern
Illinois and Mobile & Ohio; the South
western expansion suggested for the
Burlington rather than the logical alb
sorption by this system of lines between
Colorado and California; a continual
ton of the Missouri Pacific westward
from Kansas City to the Pacific Coast,
instead of combining it to its natural
territory in the Southwest, and the
right-angled ally apportioned to the
Union Pacific in the shape of the Kan
sas City Southern.
The Pennsylvania Railroad has long
cherished its control of the Norfolk q
Western through stock ownership. If
one reads financial records carefully, one
VIII note the automatic response in the
Norfolk & Western dividend rate to in
creaseS in the Pennsylvania dividend
rate. Commissioner Porter remarks in
his opinion that the Pennsylvania has
declared that 1t will not part with its
ownership or control of these impor-
tant and necessary elements of the pro-
posed system (the Wabash, which in
cludes the Lehigh Valley and Norfolk
q Westerly until they are compelled. If
ever, anywhere short of the last legal
ditch" If this is the PENNSYLVANIA
roads attitude toward the Lehigh Valley
and Wabash, 1t is even more so to the
Norfolk e. Western, which was bought
cheap and pays a high return, whereas
the other two roads were bought high
and yielded comparatively little on the
cost price.
Situation Of Northern Lines
The arrangement provided for the
Great Northern and Northern Pacific
includes their divorce from the Burling-
ton, and as the commission has had be-
fore 1t for nearly two years the applica-
ton for merger of the Northern lines
1t is presumed that this petition is, In
effect, granted If the petitioners waive
their interest in the third member of
the family. There is considerable doubt
as to their willingness to do this. They
certainly cannot do 1t without obtaining
the consent of a majority of their
shareholders, which have to be ACQUIRED
after a dissolution OF the present de-
post agreement, which does not commit
these owners to merger that cut them
on from the rich legacy of the Bur-
lington.
Roth fro,,o ~, 1,oyo.3....L - 4.s