Show LIQUIDATION IN III STOCK r MARKET ARKET Trade Poor But Agriculture ture lure Benefits From Fair Pi Prices ices dr CH RLES MILLS F. F Sp Special W Correspondent of The Stand Standard S nd ard ard Examiner 1927 1027 Consolidated Press Association aU on NEW YORK Oct 22 Liquidation 22 22 Jn In Inthe the stock market this week has not 1101 been large luge In volume but It his has fc t b- b n constant and of the sort that Is unsettling un un- un- un settling seWing Since October 5 5 when the high average of the year was reached the decline has amounted to ta 13 points This Is 15 about the same average loss that occurred In l In August Angust A follow following o ing the of i t Coolidge I that he would not accept a third term tern nomination Th The selling n rr nIve Ive lve how how- however however ever has hIlS been quite different In the thelast thelast thelast last Instance than In the first Primarily It has Ms been due to tel be belated be be- belated recognition of the fact tact that market values alucs for speculative cares had run out both normal nonn l Income re returns re- re returns returns turns on these shares and prospective earnings An obstinate bull clement element had been n for tor months bidding up prices on oa the supposition that easy money was f t t. only factor that counted in inthe Inthe inthe the situation and that whether or not bur bt bl less Improved the public would continue to invest Its surplus funds in securities Eventual the bull position be be- became became became came over-extended over and stale and with increasing evidence that the re returns re- re returns returns turns to industry and transportation were diminishing rich competition domestic and foreign gro grong ng ng more more intense holders of stocks began to tofe revise feIse fe Ise their opinions and to tel lighten their commitments FUTURE TREND TRE D DISPUTED There is a wide difference In lii the professional viewpoint regarding the immediate future of the market On the one hand is Js the argument that the present decline represents only a minor disturbance In a bull market and that as soon as ns the technical status has been strengthened another advance will develop Th opposing opinion is that stocks must be liquidated liquidatEd dated to an even enn greater reater extent than they have ha been so far and Use the situa situation I tion Uon with re respect to tel brokers' brokers loans must bs be b greatly improved before the public will again appear as support- support tars of the stock list From now on onit it Jt will bi be necessary to appraise mar mar- ket va value ues solely on the two bo factors factors factors' of easy casy credit and decreasing earnings and disbursements There will always be ic a certain amount of investment bu buying ln In a 0 mat mai malet et ct that has had a break of ot this tills weeks week's proportions by those hose who had stood aside while prices have lave been violently advancing I There have ha been times recently when it appeared ap eared that the market needed support and was being treated to o a kind of artificial respiration The survey suncy of business conditions made by the Coolidge administration was vas one evidence c of this Another n was I the sudden s decline cc in the th call money market to 3 per cent after a rate of of H. H per cent had been established Nothing that has come from Irom official Washington circles has been received with such skepticism and questioning of 01 the motive for It Jt as the business summary which made It appear it at trade was satisfactory in all lill dirce- dirce directions although statistical evidence docs does not support such a view In fact there is 15 a growing amount of 01 proof that business Is poor in many quarters and has failed to realize the s is ns of those who ho were even cven moderately optimistic a month ago 4 DIG BIG INDUSTRIES ANALYZED The state te of ot general trade may bt be b indicated by conditions In four major industries namely Iron and steel mo mo- motors moton tons ton oil and building construction In the first place the price situa situation Lion tion has hIlS become more important than that of production With ith Ith the mills operating between 50 and CO GO per cent of ot capacity producers have been quietly making concessions conce lons to tel con con- consumers consumers sumers In order to tel stimulate orders and have e created a Very unstable price condition There Is a level Jevel at 8 which buying will be resumed Hi Ih hopeful feature is that this level lev 1 ha has about been reached Such reports leports as u those of ot Republic Iron and Steel and Trum- Trum Trumbull Trumbull bull Steel for the September quarter plainly reveal the effects ot of low prices and small output during the summer months After sailing along gayly through through- throughout out the year and being the most con con- conspicuous conspIcuous conspicuous of all American industries for large profits the automobile world has finally wakened to t the for reduced earnings that lie in the forthcoming appearance of the new Ford car This has resulted in much liquidation in the shares of the leading producers even where there U Is and will be be abundant margin of return to Justify continuance of present dividends dJ For the time be be- be being being ing however it Jt Is fairly well established In the minds of bankers that record of net earnings cannot bs be b duplicated by the tile three or four companies that have had a I harvest time while the new Ford model was In the making OILS RESIST SELLING From the standpoint of f production the oil Industry shows Improvement The dally average a output is falling both In the southwest and on the Pacific coast t. t However the effects of nearly nine months of excessive sup sup- supply ply are now becoming cumulative and will make themselves felt more and more in reduced cash reserves and smaller dividends Whether or not the end of the hard har i times Is Js in sight It is significant that this week there was more resistance on the part of oil stocks to tel the general genera selling wave than iby by any other prominent speculative I group The two Industries that lave have con- con most to tel the general prosper prosper- prosperity ity of the country In the last five years run ars are arc those given glyen over to t the pro pro- production production production of automobiles and to the construction of buildings The most moat complete analysis of ot building opera opera- operations operations published h presents figures this I t IJ week which clearly ea I Indicate a a. slump in he building trado trade In practically every section of the United States This survey states that the general business interests of the country can with certainty now plan on less le sup sup- support support support port from the building Industry dur dur- during durIng during ing the ensuing four or five live months month than was the case last winter clors AT rAm PRICES There arc are other Important indus Indus- industries Industries tries that are doing dolD well and making profits for their owners Although railroad earnings do not compare favorably with those of last year the I surplus available for Interest and dividends out of this years year's receipts is so large that there are more dividend divi increases hi tn prospect than des de de creases The public utility Industry out of the enormous expansion and Intensified program of the last few years ears generously financed by the American people with great profit to tel Itself is probably in the soundest con con- condition I In its history Agriculture is ts from fair I crops at nt fair prices though even here there has been deflation nation de as In tn corn cores cornand and cotton from tho the high price levels of six Ix weeks ago ngo The south does not feel so eo prosperous with Its small cot cot- cotton cotton cotton ton crop at ft n pound poune as It did last month month- with the market prices at and the corn com states though favored by unusual September weather and with the crop now 80 per cent free from frost must adjust their pur pur- purchases purchases chases chaus to tel a price of for corn rom in instead In- In Instead instead stead of 1 lo 20 The high points In let the International al situation this week have been the strength of or English and continental exchanges additional dollar loans to Europe and formation of a chemical trust by Germany France and Eng Eng- England England land which eventually like the ex existing ex- ex exIsting existing steel s l combination must come into Intel competition with American man manufactures man man- manufactures In one way or another all of th these se developments bear on the ultimate future of American trado and credit and therefore on American Amer Amer- Amerlean American ican lean securities |