Show FAVOR SHOWN MOTOR BONDS BOND Rail Securities Decline In Public Eye Dodge Sale Success BY D BYRON SElLER It Special t of oC The Standard Examiner Copyright 1925 1 by The Th Consoli Consoli- Consolidated Consolidated dated Press Association NEW YORK April 11 It 11 It has haa been a week of oC extraordinary Interest In- In terest rest In the In Investment market marketon ono one of confusing conCu cross currents current and apparently contradictory ten ten- tendencies ten tendencies but one In which three fe features tures stood out a ft sudden de- de development development de development of doubt as to the th out out- outlook out outlook look for the railroads a favor tavor shown to securities founded upon the automobile Industry and grave concern about about- the th future ot of French finances marked by weak weak- weakness weakness ness In French dollar bonds bond The Th public attitude toward rail rail- railroad railroad rail railroad road Investments has undergone a complete change chance from that held l last January Then expectations ot of dividend Increases by corpora corpora- corporations corporation lions tion already sharing their pros pros- prosperity prosperity prosperity with their stockholders and of Initial disbursements by roads not at that time on the dividend paying list as lIS well a as speculation as to th the effect of oC mergers pres pres- present present pres- pres present ent and prospective were all the th fashion Now lI ow It Is I just th the opposite opposite site The talk Is I of dividend r rO- rO reduction and most of oC the merger plans plan worked out with so much detail In Wall Vall alI street have hav been fOrgotten The delay In the th con con- consummation consummation con consummation summation of oC the th Nickel Plate consolidation forced by the attl- attl attitude atti attitude tude of oC the minority stockholder or oC the th Chela Chesapeake peake 8 Ohio Will was very discouraging to the merger enthusiasts The Th acute acut weakness which cropped out In the th shares of oC the th Chicago o Northwestern on the stock exchange bringing with It the suggestion that the dividend was In danger dancer and the th selling of oC the Pennsylvania stock later In the th week w ek although with with- without wIthout without out any talk about dividend change all had a disturbing ef effect feet PESSIMISM O ERDO OVERDONE E Probably pessimism on both these accounts was much over over- overdone overdone overdone done That Is the way with W aU ll street tr et It It- was officially denied that there was any Intention of oC disturbing the Chicago North North- Northwestern Northwestern western dividend and this appears I reasonable when it Is I remembered that continuation of oC pay payment pay pay- payI paymentS I ments ment of oC at least four tour per cent annually I Is necessary to th the con continuance con con- continuance of the company's bonds Ont ant he Jle list list- of oC those legal leeal for sav-Ines sav say say- savIngs sayings Ings banks As to the prin prin- principal principal prin- prin principal cipal Influence was doubtless the publication of the detailed figures In the annual report showing as as they did a heavy decline In net earnings from those of 1923 There was really little new in the totals or at least nothing which could not have been deduced from froma a study of the monthly reports Emphasis was wa laid however on the damage done by automobile competition not only In the nat mat matter mat matter ter of ot passenger but also of ot freight ht traffic The Th same sam plea was made madIn In behalf of the th St Paul at the time the th receivership proceedings were started MUST CUT This Is a much more mor funda funda- fundamental fundamental mental condition than any varia varla- variation variation tion in earnings due to changes In business activity As was point point- pointed pointed pointed ed out In the th Pennsylvania re- re report report re report port If it the th public Insists Insist upon paying the th higher charge charf of mo- mo motor motor mo motor tor car transportation there ther is nothing for tor th the railroads to do but to adjust their affairs accord accord accord- accordInglY accordingly It means the abandonment of oC branch lines which are arc no longer loncer profitable and the cutting down of service In other direction tion lions This process of ot readjust readjust- readjustment I merit ment will tak take tim time and until ItIs It ItIs Is completed net Income must suffer Complaints on this score come from front practically every see sec section sec section tion of the th country but in less degree from tho south and south south- southwest southwest west south west DODGE l SALE S STRONG For the optimism about the tho th fInancing followinG the th sale ale of the Dodge Brothers property Is doubtless mainly responsible The success of the th first offering of oC the th new rew Dodge securities was a surprise even to those who had bad been most mOlt confident Wall Vall street str t Is I constitutionally constitutionally constitutionally skeptical t ii Id such mat mat- mattere matten matters ten tere but the th outside public was wa enthusiastic and applications forth the stock lock were greatly in of the supply Taken as a a whole this financing Is I the largest of the account of any industrial cor- cor corporation cor corporation on record the th nearest approach to It 11 lt being the th sale sal In 1923 of the th Anaconda bonds bonda This tact fact alone alon Is I a strikIng con com commentary ment ry on th tho phenomenal growth of th the tho motor car business The rush to buy th the new securities securities ties I Is also proof of public faith itt In th the future of th the automobile trade A As In Investment propositions propositions tOns it Is necessary to bear In mind that thai thes these automobile stocks depend for tor their thIr th lr merit entirely on earning power and not on asset value Commentators made madea mad mada a good food deal of this point In the cue se of oC the tho th Dodge Dode Brothers sale but the th same sim criticism applies In greater or less degree decree to all auto auto- automobile automobile auto mobile company shares share There Ther was wa nothing surprising about the weakness In French bonds Although dollar Issues Issue are arnot not so o much affected by the vagaries of oC French finance con con- concern concern con concern cern on the th part of oC the th holders wu was to be b expected To argue that no matter what may be b the outcome of oC the th French financial tangle there will bo bl b no disturbing of the th external debt Is I logical but ineffective as u a market factor Under the circumstance the placing of a new nw French loan Joan In inthis this country would Involve pay pay- payment payment payment ment by the French of an ex- ex exorbitantly ex exorbitantly high Interest charge chare |