Show STOCK MARKET REGAINS HEIGHT Credit Plentiful But Dan Dan- Danger Danger Danger ger Signs Apparent ApP Motor Trade Lags BY ny CHARLES CRAmES F. F I SPEARE Special Corr Correspondent of oC The Th Standard Examiner Copyright 1927 By The Consol Consoli- Consolidated 1 dated Press Association NEW YORK June 18 During I the week weel weel from Crom June 7 to June 1 14 14 the stock market had an average a decline of oC over 7 1 points culminatIng ing In Tuesdays Tuesday's TUf das break of oC large larg proportions The Immediate sequel was a recovery so pronounced a ato as asto asto to make mako new converts to a spec spec- speculative speculative situation that continues continue dangerous because Wie of ot the high price level lev l and the Increasing In In in- of oC trade reaction Confidence promotes confIdence and so IO long Ion I as there Is within I tho the market such an element o of technical strength as It has been bee been I exhibited lately it will be difficult to persuade those who have stocks stock to sell lIell them or those who ar are tempted by the steady rise in quo quo- quotations quotations not to buy them Under such conditions the In Increase In- In increase crease creaso this week In the divIdend dl on New York Central railroad stock from 7 1 to 8 per cent had ha much greater effect on the gen gen- general eral market than did the tho passing of oC dividends on the shares of tw two small rubber and tire companies and an electrical company am and the Internal distress suggested 1 In Inthe Inthe the collapse of oC the bonds of or a concern manufacturing Ing leg machines While many new high prices were reached In rail rall- railroad railroad road and Industrial stocks there ther were also a number of ot significant new lows s In the common ane and preferred d issues of oC outstanding manufacturing and distributing corporation PLENTY OF CREDIT The abundance of oC credit avail all able for operations in the stoc stock market mt has he long been a A. primary cause ause of oC the advance in prices With gold gol reserves Increasing ant and a great many people will prefer to 10 own securities rather than t to keep their money In banks After ACter nearly a month of oC relatively firm call caU rates the quotation dropped at tho the end of oC this week to 4 pc per percent cent Time loans however have hav been firmer Influenced by this the market marke for investment securities has been bee slipping oft off a little each da day There are signs that good bonds bond have now reached a level where they may be attractive to those thos who felt that tho the range of ot prices price In April and May was too high high for tor the present even though bonds bond may In the next year or two establish themselves on a a. consid consid- considerably considerably crabby higher plane It Is now being recognized that tha thano no small portion of oC the Increase in brokers' brokers loans' loans which have hav steadily climbed up from 2718 2118 in the middle of or ary to last lut week Is the result of oC an accumulation of or bonds in the hands of ot under under- underwriting underwriting underwriting writing writing- syndicates or dealers wh who have been unable to distribute them to the ultimate consumer As An these bonds move out of oC origInal origInal Inal hands Into those of oC Investors investor In the course of or tho next tw two weeks of oC large investment oper opec operations operations the loan situation should be improved providing there 1 Is no greater exploitation of oC stocks stock than we have had recently It may be put down as certain that there will be no reduction in the tho discount rate of the fed fed- federal eral crab reserve reser bank before August Augus 1 1 and possibly not during th the year fear The fhe tendency abroad o oate of oC late ate has been toward higher higher- rather ather than lower bower discounts This Is s illustrated by the advance in Inthe inthe the he Bank of oC Germany rate from fron 5 per cent to 6 per cent ant and some discussion of a higher rate In London More will be known of or the policy toward International money conditions following the confer conter conference conference ence In New York In July or of orthe the he governors of the Bank of oC Eng- Eng land and the Bank of oC France am and the he Bank of ot Germany with the heads leads of oC the federal reserve bank bankIn In n this country Looking over the business sit alt tho the familiar ar aspects of or a large arge distribution of oC merchandise with a a. falling Calling ratio of oC profits to gross revenues may be observed Prices of oC pig iron have declined to the level in five years ye ars and there thue seems to be a a. steady shrinkage in the output of at the United States Steel corporation and In lit that of oC its chief com corn In the automobile trade the decline in production Is slightly more than seasonal with the bril- bril brillant brilliant lant results of oC the tho General Mo Mo- Moors Motors Motors tors ors corporation possibly coloring the he situation more highly than thant It t should be One section ot of the automobile trade namely tires 3 is assuredly not In a a. prosperous state stale The whole rubber tubber industry Is s somewhat In the same position that hat textiles were In for tor several years Investors in New England have lave been nearly as DI anxious this week over the action of oC United States Rubber preferred stock as aa they hey were formerly over American Woolen preferred The situation in crude crudo rubber rubbers is s not unlike that which occurred In n raw sugar at the end of or the war and which compelled operations in order to cornet corr ct the ill ut effects of oC over over- production In the case of oC cot cot- colon cotton cotton ton on the supply oversupply from the 1926 crop has been taken care of oC f through the Investment In this stAple at abnormally low bow prices by y American and foreign spin spin- flees ers FARM FAR CONDITIONS S IMPROVE UI 1 One of oC the strongest stron est features In n this situation today is the re- re cov ry In the purchasing power of f the south and west due to the advance in the last few months ot of f six cents cent In the tho price of oC cotton and nd from 20 to 25 cent cents in wheat heat and nd corn This has given Iven new courage to the agricultural dis- dis di districts where the gain In purchasing Ing ng power has resulted in greatly increasing orders for agricultural household necessities nd luxury articles |