Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-04
STOCKS SHOW FIRM
UPWARD TRENDS IN
NEW YEAR TRADING
Constructive Note in Railroad
Merger Announcement Aids
General Market.
PRESSURE ON LIST LIFTS
AS TAX SALES CONCLUDE
Early Part of 1881 Expected to
Bring Harmony Into Many
Industries.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK, January Sit was a
common saying in the latter part OF
1880 that, until some development oc-
CURED that would turn the mind OF the
public away from the disintegratlng
effect of declining prices of securities
and of commodities and flx 1t on spe-
cific program of a constructive nature,
there could be no more hope OF re-
vival in business or in stocks.
An event of the desired nature has
taken place this week in the announced
agreement of the four Eastern railroad
systems to effect a consolidation that
will be in the public interest and per-
nit them to launch out on a campaign
of expansion stimulating to every
branch of industry that prospers as the
carriers have the means or are in the
mood to progress.
No less inspiring than this fact is the
evidence of leadership in Washington
and in Wall Street in promoting an
entente in the field of steam transpor-
tation that may encourage others to
look forward and not backward.
Four Lines Make Concessions.
The proposal for a division of the
trunk line territory has the approval of
President Hoover. It is the result Of
concessions between four of the strong
est railroad systems of the country, en-
couraged by their bankers and a major
ity of their stockholders. 1t is in &C
cord with the spirit of the transporta-
ton act passed by Congress in 1920. 1t
has been, in effect, advocated by the
Interstate Commerce Commission. 1t
promises to improve railroad service in
the area covered by the mergers. There
is every prospect that it will quicken
the pulse of business. Those who OPP
pose it have nothing to offer that will
equal its influence for betterment Of
conditions from which the entire coun-
try is now suffering.
If the Eastern roads are denied the
right to merge, it will be because Con-
gress, which 10 years ago favored con-
solicitations in the public interest, now
rejects the idea, or through the unwill-
ingneSs Of majority in the Interstate
Commerce Commission to stand by pre-
vious declarations in behalf of a unfit
cation of systems east of the Mississippi
and north of the Mason and Dixon line.
Effects on Labor Anticipated.
It is obvious that the benefits of con-
Solidation to the carriers must come
largely from curtailment of duplicate
service This affects labor. Probably
rs per cent of the economies to be
effected viii be in the item Of wages.
The hard road that other mergers pro-
posed in the Northwest and in the
Southwest in recent years have had to
travel has been over a natural opposi-
ton from those who saw in them the
loss Of positions at division points, in
shops, in Offices and as members Of
train crews.
The net threat of still greater unem-
ployment in railroad service, where the
total employed has been falling month
by month, is one that has been an
ticipated by the carriers. It may be said
that every means will be taken to avoid
displacementS and reallocation of per-
sonnet, while the consolidation plans
are being carried out Neither Presi-
dent Hoover nor the men who have
been most active in bringing about the
merger agreement would have spon-
sored It had not assurance In favor of
maximum considerations for labor been
given.
Trade Stability Furthered.
There are indications that the early
part of 1881 will be notable for efforts
to bring together interests, whose con-
f1ict in policies Of production and dis
tribution has contributed to the de-
preston In business and in securities
for the past 16 months. Some
progress in this direction has already
been made in the copper metal trade.
This is now being evidenced In the
greater stability of copper shares. In
1880 these shares deprecated over
81 ,250, 100000. The movement has re-
suited this past week in the smallest
output of crude oil since the Summer
of 1926. AS one of the major indus
tries and one whose securities are
widely held, an improvement in the
petroleum trade is highly essential to
general prosperity. Oil stocks last year
showed net decline in market value of
approximately $l,800,000, 900. 1t is also
fetr to assume that indications of
greater friendliness In Washington to-
ward the railroads will modify the at
tttude of Congress and Government
commissions toward the public utili-
ties. whose shares on the New York
Exchange in the last IL months de-
preciated over so per cent, or about
$2,250, 0O0, 900.
In the banking world there are signs
of greater coordination and strong
leadership since the epidemic of bank
suspensions broke out last Autumn.
This has been reflected recently in an
! absence of bond liquidation, followed
this week by vigorous recovery in all
grades of domestic issues.
The stronger market for both stocks
and bonds since the end of the year
| is not based so much on a favorable
| change in sentiment as on a change in
technical conditions. If there were ever
| any doubt as to the effect of tax SELL
| ing, 1t must have been dismissed dur
| ing the past "a hours. Without any
direct improvement in their speculative
or Investment status, securities re-
bounded many points when freed from
\ the pressure of liquidation whose main
| purpose was to reduce income tax pay
nents.
(CopyriEht, 1917