Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-05
rights" SITUATION
CONFUSES MARKET
Drop in Stocks Makes Recent
Offers ValueleSS to
Investors.
BY John =. sINCLAIR.

Special Dispatch to The star.
NEW YORK, November S.-When
eight large corporations announced
meetings this week for the purpose OF
modifying or Withdrawing altogether
the offerings recently made for SUBJ
scriptionS to rights" to purchase their
common stock at figures substantially
below the market OF three weeks ago,
1t brings out one of the complicated
problems which the market has had to
meet. The market situation was az
gravated last week by the fact that
very large payments or rights" came
due at about the same time that the
stock market drop occurred.
For the year 1928 a total of nearly
81 900 .000, 900 of money was obtained in
this way, Of which a large part-nearly
one half, in fact-was used not for i'm
proving the plant and equipment. but
for the purpose of loaning in the stock
market.
One concern, with common stock
selling at $50, offered rights" to its
stockholders TO subscribe for additional
common stock also one the basis of one
share for every four shares held. But
the stock of this corporation dropped
last week TO $33 and recovered to $45.
These rights" are Of no value any
longer.
With the rights" eliminated, the com.
mon stock situation entirely changes.
Stocks in the boom were bought in
many cases for the rights" more than
least for some time, stocks will be
bought on the basis of actual cash
dividend returns to the investor.
And that is something else again.
Air Mail and Stock Sales.
a
several interesting things. One OF
these was the striking advantage of the
air mail ct such . time.
Never In the history OF the air mail
have so many stock certificates been
transported from the West to the East
as during last week. It required only
80 hours between the Atlantic and Pa
cific, causing the loss of but one busi-
ness day, contrasted with three business
days by regular mail.
The Boeing System, which carries
about 80 per cent Of the Nations air
mail on the San Francisco Chicago and
Los Angeles-Seattle routes, estimates
that the average daily transfer Of ga, :
100000 Of certificates and interest
bearing papers by air mall was prAc-
tically doubled during the peak OF last
week.
Banks now are using the air mail
too, to prevent kiting Of checks. People
who write checks expecting flve days
grace before they are cleared on the
other side Of the country md the air
mail has largely nullined that ad-
vantage.
Z. Hamilton Lee, Boeing air mai
pilot, has completed i,25O, 900 miles OF
Tying. He has spent 12,a00 hours in
the air: fiown IS different types OF
alrplanes and used 80 different types OF
engines. Lee never had q major acci-
dent. nor has he lost . pound OF air
mail.
He has the srecord for having flown
more miles and more hours than any
man In history.
Aftermath Of Crash.
The conservative Commercial and
Financial Chronicle OF New York, view.
ing the recent market smash, sums 1t
up In these words:
1.-THE week has witnessed the greatest
stock market catastrophe Of all the
ages and it has left behind d tran Of
misery and distress, with many losses Of
such huge MAGNITUDE and such wide
s3read nature That there can be no
question Of It's being without parallel
In stock market history"
These are strong words. But the
picture Is not overdrawn. The amount
Of havoc which the market wrought will
not come to light for many months,
some Of It not for years.
And yet many stock market observers
were predicting yesterday that the mar
ket would open with q jump and would
return to normal"
But an injured man, run over by an
automobile, doesn't make q 1OO.foot
dash down the street Immediately after.
ward.S He goes to o hospital to recu-
perate. That's what the market did
yesterday.