The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1910-12-05
Financial Situation Is Get
ting Enlightened.
BULL MOVEMENT UNDERSTOOD
RetrOspectiOn Indicates that En-
largement of Industrial Life Has
Exceeded Consumption and that
Nation Has Not Yet "GrOwn Up" to
TO-day's Manufacturing Capacity.


ment which began about the middle of
last October TO advance security prices,
or at least the prices OF certain stocks,
has ingloriously collapsed. as It was
bound TO do sooner or later, a more dis
tinct appreciation OF the character OF
this effort and OF the financial situation
generally is beginning 10 MAX Itself felt
If the movement referred 10 was en-
honest attempt to bring about prosperity
by the use OF the so-called sunshine
tactics. it was a piece OF Thoroughbred
stupidity. II it was dishonest as was
more likely. It was a species OF brazen
imposture OF the peculiar kind that has
lately been associated with the name OF
DIR. Cook, and represented I'm substance
an attempt 10 induce the public, by the
circulation OF fictitious stories Of bust
ness conditions that deceived nobody
into buying stocks at a grossly inflated
level
Business Is Relaxing.
It was as plain in the middle OF Octo-
Der as il Is to-day that business, instead
OF charging or even holding its own
was relaxing; that IN the iron and steel
trade In particular there were indica-
tons in abundance that the industry for
months back had been slowly but stead
| fly approaching the narrow pass not un-
known 10 1t In previous years. where ar
increased capacity of production gener-
ated In boom times had TO contend as
best il could with diminished consuming
power: that labor was restless and dis
contented; that the investment market
had become fiat; that the high cost OF
! living had brought about a species OF
| hiatus IN national economic affairs by
means Of which the accumulated savings
/ OF the eastern portion Of the country
were drawn upon TO provide the neces-
saries or life and transferred to the agri-
cultural sections, with tho result OF
I bringing about comparatively hard times
| In one part Of the country and state
| Of undue credit expansion. born OF newly
/ found riches. In other parts; and that
J the whole business and financial world
] was curtailing its operations until II
could know the result Of the application
| OF the railway companies OF the country
/ to the Interstate Commerce Commission
| for increased freight rates and the final
| construction by the Supreme Court OF
/ the United States Of the antitrust law.
market had already occurred that rel Re
/ scented what many people thought 10 1e
/ II anything an overdiscOunting OF IN,
( favorable results Of the seasons crop, o.
I the disappearance OF fears as 10 money
/ stringency. and Of the prospective star
/ 20 be given Rooseveltism in the elections
! A renewal OF the upward movement only
went a little way before IL was plain {,
every intelligent person that what wa,
going on was a mere churning OF tn,
waters IN a Hfeless market The break
therefore, when II came. surprised very
few people
Recovery VIII BE Slow.
As regards the merely speculative sid'
OF the stock market, a fair conclusion
| seems TO be that inasmuch as business
/ conditions have not grown any bette
/ since the time when the recent ris,
/ started. not much can be expected IN tn,
I way OF an important recovery in prices
/ except that made by the sporadic cover
/ ings" OF the short interest. This shor
interest, it may be said. was last weel
| very considerably increased. The presi
dent of enc OF the greatest banks in IN,
country said last week that business
! over the country is about one-third of
with the chances favoring the fact tina
| It will ba somewhat worse before II 4
/ better
! Such decreases IN railroad earnings a
/ have been lately reported speak for them
selves, and unless the theory is accepte,
/ that the many and varied reports OF thi
/ kind are all criminally false, II is plail
| that the present rate of dividend dis
tribution OF more than one importan
railway company Is In danger.
Acute attention is now fixed, as II 1
pretty nearly at all times. upon iron an,
/ steel. There appears no dissent in an,
well-informed quarter from the view tina
the prospect here IS for two or thre
/ months OF dull trade in the future a
any rate. At a meeting OF many OF IN
| leading iron and steel manufacturers he'll
/ in the city last week TO discuss trad
! conditions It was resolved not to max
any cuts IN iron and steel prices; bu
Judging by past experience in these mat
/ ters what seems to be the truth abou
| the present situation is that cuts IN irol
and steel prices at tho moment woul
| be Intellectual In stimulating new bust
| ness.
! The inference IS unavoidable that tn
period OF depression In the trade has no
! yet reached its height; and just whel
this height will be reached is something
/ about which almost everybody seems L
| be In the dark. This brings up for dis
cusslon squarely the general state o
business future OF the country as dlstin
! guished from the more speculative situa
| ton and day-to-day movements OF Sc
| curity prices In Wall street.
It is now recognized by all conservative