The Washington herald., 1920-05-14
STOCKS SHOW
LOWER TREND
Public Beginning to Realize
True Underlying Busi-
ness Conditions.
DEFLAT1oN UNDER WAY
Speculation and Pro6teer-
ing Hard Hit by Federal
Reserve Action.
DEFLATION UNDER WAY

New York, May 13.-Wall Street
heard today that many leading man
ufacturers find their factories so
lacking in raw materials that they
wiz be compelled to close until the
railroads are able to bring in fresh
supplies They have millions Of dol
lars of raw and finished material on
cars standing on side tracks, and
by reason of their inability to turn
this over their bank credits are suf-
fering. AS the banks are calling for
payment they are compelled to sell
the only liquid assets they possess
stocks and bonds. This is the true
story of the stock market.
Liquidation, forced by labor
strikes and short selling by profess
sionals, found few buyers.
Same Old Story.
1t was the same old story in the
stock market today. The opening
was heavy. There came a slight
rally toward the noon hour on a re-
port from Washington that some
constructive news would come out
inHa few days. The afternoon saw
a resumption Of the selling, so that
the close was heavy. New low prices
were recorded in many issues, nota-
bly, In United States Steel
DenatIOn.
The market was also afraid of the
credit conference to be held in
Washington next Monday. There is
no doubt about further reduction of
loans being enforced even II the dis
count rate has to be advanced to
accomplish 1t. But many merchants
REFUSE to sell their boarded supplies
alta loss and will sacrifice their in
vestmsnts when their loans are
called Thus more liquidation of
stocks Is assured
In vain investment brokers call
attention to the fact that stocks
were never so low in Wall Street,
not even in panics. They have sold
at small figures per share, but con-
sidering the cash and assets added
since last they sold at the low fig-
ures, they are now selling even
lower.
The market was hurt by the re-
port that the American Woolen
Company had made $19,0o0.o0 in
the first quarter this year. The de-
nial from Washington was ignored.
for the Street is in the humor to
believe any story of wild profiteer-
ing. The annual reports of leading
charges made along this line.
Competitive Bidding.
Not only are necessary materials
hard to obtain from original sources
but when they appear in the mar
ket there is competitive bidding by
what are considered nonessential in
dustries
For instance. a large consignment
n
York within tie last few days, and
n phOnCGraph company outbid an
electrical manufacturing company,
although the n ateriaI was serious
1y needed by the latter ir order to
finish certain work needed for in
dustrial establishments AS an ev-
idence that the people are wax
ing up to the wastefulness that has
been going en- Wall Street ap-
plauded today the plan to lave
Congress modify the law relating to
the. reuse OF cigar boxes. The lum-
ber used in making cigar boxes is
hiGh-priced and very hard to secure
even at high prices.
Sugar.
Ohcial stater1e Mt was made from
Washington yesterday that the beet
sugar manufacturers of this coun-
try earned In 1919 an average of
59.92 per cent On their capital. while
the cane sugar men got 27.2s. 1t
would appear from these figures
that sugar could be sold cheaper,
but the American sugar comes in
competition with the imported ma
terIal, which is selling Cow at 10
cents a pound in a raw condition.
The United States can have no con-
troll over that. y