Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-16
BY CHARLES r. SPEARE.
Ipecial Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK. October 16-The sore
point in the market for securities con-
tinues to be in the bond department.
Within this department the issues that
affect sentiment most seriously are
those of the railroads. In the past two
days the decline in these obligations
has been pronounced and on the aver
age as great as any in the period OF
reaction. Nothing has yet been done
in a concrete way to check the liquida-
ticn in railroad bonds and thereby
spread a more hopeful sentiment over
the financial district. The situation in
the market is that it is being supplied
with as many offerings as it can absorb,
with other offerings in the background.
Bonds Sway Markets.
The point cannot be emphasized too
often or with too great force that an
improvement in the stock market de-
ponds primarily on a Sterilization OF the
prices of bonds. This is why Wall
Street listens eagerly day after day for
intimations from Washington that
plan is being formulated TO relieve the
embarrassment of these carriers that
have maturities ahead Of them and
whose treasures are short OF cash. 1t
was rumored today that an issue OF
maturing Seaboard Air Line Railroad
equipment trust certificates was not to
be paid off, though the interest on the
certificates is to be met, and that the
policy of the receivers OF the road
toward subsequent maturities will be TO
defer payment of principal, but TO take
care of all interest obligations on their
maturing equipment issues.
Delay in preparing and putting into
operation a relief plan for railroad OBJ
d. lN-yf In inn
clsion of the Interstate Commerce
Commission in the IS per cent freight
rate case No one apparently wishes
to act until the opinion of the commits
sioners in this case is known. There
were rumors today that an announce
ment from the commission would come
Immediately.
Railroad men and railroad bankers
have about abandoned the idea that
the commission will allow an advance
in rates of sufficient size to permanent
~ improve the credit of the carriers.
A 10 per cent advance, which Is the
maximum expected, would undoubtedly
have sentimental effect, but tenn
porary one. 1t could not soon enough
change the actual cash position OF the
railroads to relieve them where they
have maturing equipment trust GER
tificates or mortgage bonds in the next
SIX months.
Inasmuch. therefore, as the effect of
a persistently weak bond market is
that of disturbing credit conditions in
general end unsettling the stock mar
ket, to which the average American
today is looking for his clue to business
symptoms, it is obvious that OF as
great importance in correcting the gen.
eral situation as may be the 50O,000,-
600 banking pool is a secondary POI
to specifically resurrect the market =
railroad bonds and to bring them al y
to an Approximation of their. he
values. The contributions whicthe .
large banks will have to maken in :,
present pool" are relatively :when Il
the aggregate; inconsequent' of the
considered from the standpo' in any .
first installment. They do ary allo- I
sense approximate the arhe mana q
cations that were made End English ?
gers of the several Germiergencies of I
credits provided in the liking associ-
last Summer to their ted States. S
ates throughout the argued that the
Therefore, it may hent is a second a
prime need of the Need not be half S
banking pool. whi9ounced in WASH
the size of that absorb the neces- r
inpton last week"