New-York tribune., 1919-12-15
In Wall Street

erous unless the market takes a de-
cided turn after it has passed an i'm
aginary line just sixteen days hence.
Almost everywhere in the financial
district brokers and spectators are
saying that while nothing much is
to be expected in the way Of in
creased activity this month, stocks
are going to boom again after the
turn of the year.
The grounds for this belief are
rather vague. 1t is just sort of
feeling that the nations economic
books are going to be balanced on
January l, as are the books of cor
porations, so that things may start
afresh. If you try to pin one Of
these optimists down to a statement
of the foundation for his belief he
will give you a number of reasons
which are of minor Importance even
in his own estimation, and finally
come to the really important one,
namely, the conviction that money
will be easier. Why? Oh, because
January disbursements will be out
of the way, tax payments good dis
tance off, and so on.
Now, this may easily happen.
Doubtless money will be easier af-
ter the first of the year. But VIII it
be the kind of ease that would per-
NIT large scale bull speculation in
stocks? That is, to say the least,
doubtful in the extreme. There are
no signs whatever Of a let-up in
the commercial demand for funds,
while the governments require
ments are still large and the ques-
tion of providing credits for our
foreign customers becomes more
pressing every day, a question to
which an answer must be found
without delay, if grave collapse in
our export trade is to be averted.
Moreover, these pressing de-
mands are coincidcnt with heavy
drain on the country's stock of
money gold, a factor the impor
tance of which does not seem to be
generally appreciated. Loss of gold
IN such large amounts as we have
been losing it since the embargo
was lifted, and particularly in the
last two months, must inevitably
produce def1ation of credit, for
which gold is the foundation. There
fore, before an important bull spec
ulation had gone very far, it would
be found, in all probability, that the
expected money ease was purely su
perfcial. That is to say, the low
rates and plentiful supply would
last only so long as the money was
not in great demand. Let the de-
mand expand suddenly and the
chances are rates would climb fast
enough to check the speculation on
which it was based. That at least
is the view of good many bankers,
and it certainly is the logical thing
to expect, in view of the attitude
taken by the Federal Reserve Board.
But because the prospects for a
great bull market early next wear
do not seem to be bright, it by no
means necessarily follows that Sc
curity values will not improve. On
the contrary, they may do so, al
though there are so many uncertain
ties ahead that it would be hazard
Gus, indeed, to forecast the course
Of security prices. Measured by or
binary standards, many securities
look cheap at prevailing prices. But
these are not ordinary times. Never
theless, it may be found in the end
that the unfavorable elements in
the situation have been largely dis
counted.
If domestic business could be con-
sidered as a thing apart, the out
look would be promising indeed.
Never was there so much work to
be done. Take the situation in the
steel trade, which is itself barom-
eter of business, for an example.
During the war the capacity of
American steel plants was enor-
mously increased. Productive facil-
tiles were expanded so much that
many observers held the peace out
look for the industry to be as
gloomy as it we'll could be. A very
large part Of the facilities, they
were certain, was bound to fall into
disuse, because there could not pos
sibly be enough business to keep the
plants going at reduced pace.
Yet exactly the reverse has hap
pened. During the war peace de-
mands went unsatisfied, in order
that the demands of war might be
met. And for one reason or an
other, chiefly becahse of labor
troubles, still greater additions to
the amonnt of Deferred husiness