3 The Effect Upon Stocks of Industrial Corporations
Here we have a different proposition. Rising prices for commodities do not interfere with the earning power of corporations which produce and sell commodities, the prices of which are not limited by law. In fact these corporations are, in many cases, gainers by this influence which tends to advance prices, not only of what they buy, but of what they sell. It may be added, parenthetically, that railroad companies which own valuable coal lands, etc., find the bad influences already discussed partially offset by the gain from such holdings. The railroad company, however, may be considered as pre-eminently a seller of transportation and has been so regarded herein.
The industrial corporations whose products are subject to regulation by law, such as gas and electric lighting companies, are subject to practically the same influences as those which operate against the prices of railroad stocks. Their cost of production advances easily and inevitably, and the selling price remains fixed, or advances with difficulty and under protest.