| Show HiGHER TREND I IN SECURITIES Three Months of Decline Followed By Turn for Better fly ItY STUART 1 IVEST I VEST Special I Correspondent ot or the thc Standard Examiner tn Copyright 1923 NEW YORK July 21 TIle The Itcek past It week cek has ha seen een a II definite turn for tor forthe forthe the better In Wall all street attaIn affairS after three months ot of almos un- un un pro ed decline In it Its first t stage stae this decline wis wisa H Ha a reaction from the over over overenthusiastic l- l speculation ot of the winter In Its secondary stage It was the ro- ro re readjustment adjustment of or stock e values to a II sobered view ot of o tride prospects the lew that there was vasto to b he no boom and the buying movement was not to continue t at any anything like the pace puce set durin o I lar and II March arch But finallY toward the end nd of ot May through the greater creater part ot of June Juno and Into the first rim fey lev te dais dabs of or July the r fail In stocks was 1 no longer lonser a re or a logical It become a 1 d demoralized d selling movement Impelled by Ly n net nl sound motives but simply liquidation or of P speculative accounts after aCter the prolonged drop In prices J POOR n n The ordinary unction function of or the tIe stock stoel lock market Is to lo anticipate te ness ness nes Ch changes but this thi Is i by hy no means mean an rule Speculation Speculation lation carried to an extreme on one sIde ld or the other often orton pro pro- produces pro produces duce duces false fal e Impressions Tb- Tb Th first great war market In 1916 1911 was nas jot jot- followed fol followed lowed by a break brak of ot such uch proportions ions as ns to lead many to think thit the tho accompanying trade panon e e was at an end Yet in 1915 1 tele prIces went higher than e er eer cr er Sim- Sim Sim I had one judged by tho creat reat hull bull huh movements of or October J 1319 J 19 and April 1920 1120 the conclusion would have been that the inflation Inflation- In inflationary ary any period In the business waS to continue Indefinitely More recently still till there I Is the record ot of ota ofa ofa a year ago aeo when severe sever downward downard reactions in June and nd No No ember were tre tollo followed cd by even larger larcer re- re to rc 0 cries making It clear that the declines had nothing to do w th chan changes In outside tr trade de MUST lUsT IU T OFFER R These TheBe are Instances drawn from the experience of ot late years T h rethe the market influenced temporarily It h power sp speculative forces force as not been an accurate barometer or of business conditions Wall Vall W ll street In It Its I pessimism m In June 1923 was a n no more moro guide to lo the course coure of ot events out out- outside out outside side than it was In its equally In- In In Insensate sensate optimism In the spring ot of 1920 It has tak taken n a longer time than usual to restore equilibrium for tor reasons that have hove often heen pointed out One of or these was the thee e e issue of or new t ting Ing up capital that would woul l other oilier otherwise wise Ise have been looking tor for em pm employment em- em In the market Another was Its s the tho vague tear fear which precedes a a presidential ot of changes chances inimical to the regime It became necessary und und und-r r lh those c circumstances for tor Wall Vall street to otter unusually tempting b before attracting neW nw bUYinG sot slit ut to absorb the tho from Crom hard pressed speculative holders After ACler stocks were selling to yIeld anywhere from 7 to 8 I per t-ent t ent the temptation to Investment capital was as great enough to overcome alt all other considerations consideration con UPTURN NOW tI tIThe The upturn on the stock ex exchange ox- ox change has been partly the natural recoil of ot market pre pressed sed down doC much too far tar and partly a lion tion that pessimistic about the tho business outlook the he fashion a a month ago co do not and never have squared with the facts Neither the tho situation abroad nor business conditions here ire tro an any different now from what they were when stocks were tt rt the bat bt- bot bottom tom torn at the dose close clos of ot June The Th evi evidence dence of ot the foreign has ha been heen rather ther negative S1 e tAr tr as reflecting opinion In banking circles regarding r the British reply to Germany and the tho t It met at Pane Part and Berlin K l any conclusIon were to b be It Would be that the markets ore Ire skeptical about tho the success ot of Great Britain In the role ot of o th medIator They do not look leok to see ee France oTance back do down donn n from ti her hr ex e ex attitude unless Germany tor f or sakes her her er policy pOlley ot or passive resist resist- resistance resistance resistance ance And they do not anticIpate that Germany will 11 abandon this her only effective weapon 1 guarantee that France Franc will wilt do what all other nation nations except her herselt nn and l possibly BelgIum regard ret rd as the lr fate fairand and reasonable thing to do S ES CONDITIONS inthis General business conditions in this country remain about a as they were a week 1 ago co 0 Th The time hits baa not yet come came corn for tor active buying In anticipation or of o the tb autumn trade trude therefore getan It Is not possible to Jet get an accurate line Une upon the business volume ot of th lh the closing quarter ot of the ear car But the es fact that with a to ten few exceptions tion lions stocks stocka of or merchandise and andraw andraw andraw raw raw- materials are lire comparatively small over mall There la is l an n over In crudo crude oil which has h s so ao far tar tailed failed to yield y to corrective measures measure There Thero Is some Home excess I n cotton goods In boots boot and nd shoes hoei and nd In one or two other branches s of ot n a n Iron an output will have havo to come down more mor than It has In order to accommodate Itsel itself to reduced demands dem n But these are re not serious points of weakness So long lone as s ther there Is no general Beneral overstocking c good no of ot old order orders the general business position oust mut he be con considered derd sound found The decline In commodity prices Involving as It doe does a a corresponding corro reduction In the tho Inthe cost of ot living takes take away aw y what further excuse there might ml ht bo ho for tor Increased wAge wee demands One ot of the most molt Significant ot of the tho week Hk ne k was w tho announcement by one byone of ot the largest con construction companies that it was waa ready rady to togo togo toco go ahead with with wHit new DeW contract for tor forthe the first time in two months month be- be because be Ie because cause it that wages wen In stabilized buildIng trade had become and that prices of ot had reached their peak peak WHEAT DROP The Tho depression In the th wheat trade mugs continues without any Im- Im Immediate im Un immediate mediate sIgns liens of or relief Govern n Government meat ment measures Intended to Ip h-Ip h have fallen rallen down as a they th y ere ere bound to when set lot et agaInst the W ot of supply and demand It is not noton noton noton on the th economic side that the low prices of wheat are arc a matter of at stiCh concern for tor th the reduced lag ln power tOWer ot of o the th wh t tamer far should be b largely balanced balance l by the ed buying power ot of th the cot cot- cotton cOtton ton cut ton planters and nd the corn growers Rather the danger dancer from the th t- t tl na na standpoInt lies lIu lie on the tho po- po political po side tide There was a very vry close eloe connection between n the th drop In wheat prices and the th vIctory ot of the radicals in the tho senatorial l elec- elec elec election lion tion in MInnesota The agItatIon for tor lower lowr freight rates more mor particularly rates r te on farm tarm products has ha received a a pow pow- pow powerful erful Impetus Two years year aco ago the railroads e luc was coming voluntarily cut rates on grain and allied Hied products product prod the new schedule taking effect the rol fol tol lowing January They may deLIe that It is III I the th policy to do the thing now or they m may y elict eup ip congress passes some lomo man man- mandatory man mandatory law to law to tIght fight the question out In the tho courts court There Ther Is I much at take stake for companies like Ilka 0 the St Paul raul which is bar barely ly fixed charges chari a and for others other like Great Northern and Northern Pa- Pa Pa rD Pacific which are just about scraping through h In their efforts to meet current requirements HIGH COURT MAY MAr nEW The ultimate recourse as It now appears will be to the th courtS court This body has haa ha always alway taen ta the tte stand aland that there mut be b an adequate return upon capital actually actually actu- actu ally lly Invested Inv In propertIes of or what whatever ever over sort ort LoN Lees Los than two months month ago It wont w nt further than this In Inthe inthe the case of or the Southwestern Bell Telephone company when It ld In effect that It would not of rates rate that did not tales take tak Into proper account the th cost coat of o reproduction reproduction at present pre ent price This ie- ie le-cuilon le e to be sure mire had to do with pUblic utility companies but It I is difficult to see seewhy c why the sam am me pr-In- pr prin principal cipal should not apply to railway companIes If It the th supreme court were to declare that railroad sates must bt be b fixed not with reference to what was wan actually spent pent for tor original construction and subsequent subsequent quent b boat but t with rith ret rat r once er-once to what It would cost CM eo t to re- re reproduce reproduce product re-product produce at the th present hIgh prices ot of labor the th ado ado- advocate cates cate of et reduction would un have hAT a ahard hard hud cue case ca on their theU hand bands handA |
