Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-16
News of Week Is More Fa-
V0rabIe to Holders of
Securities.
SITUATION OF RAILROADS
CONTINUES DISC0URAGING
Steel Review Appears Hopeful and
Oil Is Brighter-Commodities
Gain Strength.
BY CHARLES F. sPEARE.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, August 15.--If the in
fiuences governing the trend of bust
ness and of investments were at all
normal one might expect some quick
ening of industry and strengthening OF
markets at this season of the year. II
is a time when preparations are under
way for Autumn and holiday trade,
which presumeS larger corporation
profits to which stocks additionally
make some response.
To a slight extent this week has
witnessed the application Of old prin-
ciples of speculation to the present sit
uation. There has been an expansion
in stock exchange transactions. Prices
for industrial and public utility shares
have risen. This may be due to the
'sold-out" appearance of the market
which, with the resistance of the list at
a level about 10 points on the average
above the June low, has again created
a technical condition that professional
~ is considered bullish. However, it
must also be admitted that the news
has been less troublesome to holders of
securities and has, therefore, lifted the
pressure of liquidation from alarmed
stockholders.
Steel Reviews Hopeful.
ENCOURAGEMENT for better things in
the Fall is found in this weeks iron
and steel trade reviews, which intimate
that there has been an underestimate
of the requirements of the automobile
makers. An illustration of the present
mood Of Wall Street is the current quo
tation for United States Steel COM
mon, approximately the same as when
the dividend was reduced to "a share.
The regular quarterly payment has
been authorized on Union Pacific. COM
mon stock, to the dismay Of those who
have been going short" Of 1t. Where
there is every probability that dividends
can and will be maintained 1t should
be the responsibility of executives Of
corporations in such times as these to
make this fact known publicly instead
of keeping shareholders in suspense,
and in many cases making them VIC
tins Of rumorS set in motion for ute
rior purposes.
The oil situation also contains ele-
ments that are hopeful. Shares Of oil
companies have been quick to respond
to the curtailment of production, even
with opera bouffe accompaniment. In
the Eastern Texas field the output
within the next few weeks will be cut
down by 200. 900 to 100000 barrels per
0dy. 4 L1C Obdl1QAAd III W. VI lNcW
Jersey is among the corporations this
week to maintain its regular dividends
The income return on oil stocks that
formerly were purchased primarily for
appreciation has become a factor of first
importance, since the present yield on
a representative group is nearly per
cent.
Rails Situation Bad.
Unfortunately the condition and out
look of the railroads do not improve.
This constitutes the most menacing of
the domestic situations. 1t is serious
enough in respect to railroad stocks
much more SO in railroad bonds APP
parently the holders Of an but under
lying MORTGAGES have come to the con-
clusion that there is no health in them.
They are influenced by the same mass
psychology that forced prices Of all
stocks to inordinate levels two years
ago. Institutions and individuals today
are embarrassed by the publicly known
fact that they are posSeSsors of railroad
securities.
It was two years ago this month that
railroad stocks reached the highest
average price in their history. Then,
according to the New York Stock Ex-
change figures, the market value OF
railroad and equipment shares was ap-
proxinlately $l2,777, 200, goo. On the
first of August this year 1t was IS ,807,-
900, 900. AS there has been a steady fall
since then TO within a fraction of a
point of the June low level, the present
values are about $500, o00 900 smaller
than in 1929. Average prices are down
100 points, by the Standard Statistics
calculation.
Some commodities are showing a
sitter tone. The Bradstreet's food
index this week has had the largest
advance in over year 1t is still
about 1872 per cent under August is.
1890, and 1913 per cent below August
1929. This is some comfort to those
with an emaciated pay envelope and
who face the Winter with serious mis-
givings.
tCopyrisht, 1917