Show RAIL SLUMP is mm FEATURE Fall Aided By Refusing Advice To I Buy Shares By fly u BYRON nynON SELLER SILI R Special C Correspondent tJ of or The C Copyright 1922 1923 NEW YORK July 28 The The out out- outstanding out outstanding standing feature In O securities dur dur- durIng during during ing the week Wk a was continued decline In stocks stock of the tho northwestern rail rall- rall The Incident Is ImportAnt not simply ai as affecting shareholders er ers In these particular railroads In Its larger lager aspects U k concerns In securities rot rol the past St six Ix months those who whose business It bas baa been heen to give Iv speculative advice to Wall 1111 treet have b been en urging the tho purchase ot of railroad stocks stocka as being far tar for Investment purposes than shares In Industrial companies or even In utilities It was pointed out that railroads were ere doing a record business that their service pervice to the country wits was absolutely es- es es essential and that t there hero had hod been no Corresponding advance in the price of railroad shares In line IIno with the th rest test of ot the market 0 OUT our VT 0 For the most moot part thi this ad adIce Ice f fell upon unheeding ears ara Week eek after week made new nw records Month after atter month earn earn- ing lag earning statements were ere more favors favora favorable ble Still Investors held off ott The explanation commonly given was that they feared the effect of ot nd- nd adverse ad adverse verse legislation Even In- In Increases In Increases creases creMes such auch as that of ot th the New NewYork NewYork NewYork York Central and Initial dh di such as that of Pere PerO Marquett failed to stimulate Interest NOw o under the Influence of the slump ot of wheat and signs of the times as expressed sed In the Minnesota elec tion railroad Issues Issue led by these northwestern n roads have hate hA e been the object of or concerted bear hear attacks I and ond some ome considerable liquidation on the Ibe part art of actual holders In- In In Instead stead of ads ad ada a nl To add to the difficulty on I Thursday came the announcement of a a for tor the 1 Minneapolis olis oil and St Loul Louis All this math made mathan madean nn an unfavorable Impression n upon he very people who must be ro- ro relied re relied lied lId upon for the new capital whIch the railroads so O greatly need ned The danger I Is that these incidents will be magnified out of all proportion pro pra- portion to their Importance NO SURPRISE SURPlUS The Th troubles of the Minneapolis and St Louis were wre no surprise to the well Informed and the tho Roads Road have ha haa hao their own difficulties difficulties for a long time They clat date back ack to the cutting of ot the dividend to the tho present five per cent n ls 1 their territory Is esp espe especially l- l affected by tho unfavorable plight of ot the wh t grower rower Som- Som Som petition from the Panama Canal has also been an adverse factor as In asIn the case cao of the trans continental trans roads road Then there tease wase always the e- e e ex example ample of the St Panl Pani A decade ago St Paul stocks were high grade Investments Today St Paul term bonds sell on an ab- ab ab absurdly hl high h yield basis baslo Yet the case of the St Paul is a one The Tho Pacific Coast Coat extension has yet to justify itself and con con- con conditions condition since Ince It was built have havo been such that no mater how bow h w sound pound the original proposition was It has been Impossible for tor the system as n a whole to operate at a 0 profit FAR DONT DON'T ATTRACT The problem that executives and railroad bankers hankers Is how to restore railroad credit credit so that new financing can bo be not bv by Increasing bonded Indebtedness which In the case of most of the tho roads Is far too high h In proportion to total capitalization but by marketing of f new stocks preferred If It necessary common It if possible It I is quite evident that the present favorable earnings are not for tor this purpose There Thero must be t e some that the roads will be given nn an opportunity to work out their own salvation tree of hostile r regulation lation and legislation n It may he that the evidence that tM this weeks week's mar mar- market market market ket has afforded will be consIdered when congress meets to take up both the agricultural a and the rail rail- railroad railroad rail railroad road situation 1 I Is 18 l that the farmer needs lower freIght rates on his products but It st-Hi st do not good to the farmer by strangling the railroads The problem Is one the tho sol solution n of whIch requires statesmanship of a aUgh high order EUROPEAN SITUATION The other highly important ques ques- tion question which must be answered be- be before before be before fore our security markets can bo be put on a stable basis Is how to to- to restore re restore store actual and not simply tech tech- technIcal technical technical peace In Europe As to thIs It Is verv very dangerous to be dog dog- dogmatic dogmatic matic The most mos that can ran be saId L Is that the market price of the tho securities most closely affected foreIgn bonds does not seem to to- to re reflect fleet the same amount of ot pessi pessimism as the new news dispatches It may be that the markets take uhe the vI view that no matter how dark the outlook a way out will bo he found simply because It must be bo found Undoubtedly the most dangerous aspect apet of the whole situation Is that the currency collapse In Ger Ocr Germany Germany many will bring about a real Teal crisis before this way out Is discovered Against all this gloom may be set the continued easo ease In the money market Aa As far tar as aa the future cnn can bo be read from the action of the hIgh grade bonds the outlook Is f for r abundant credit for a long time tints to come Trade conditions remain fa to favorable a Such action as has hag oc- oc occurred oc occurred Is normal to the season There continues to be over ever overproduction tion In oil but sooner or later latet that will correct Itself While wheat heat Is islow Islow 10 low corn Is high And business is ii still going ahead hopefully If cau can cautiously cautiously |