New-York tribune., 1920-08-02


tone Of optimism discernible only few
weeks ago and is coming more and
more to a&ealization that the times are
not propitious for a revival of specula-
tive operations. The stock market
last week, as on recently preceding
weeks, suffered mainly from a lack of
buying power. Nobody cared to buy
stocks and such condition invited
selling by the professional trading
element. The professional selling in
duced a certain amount Of liquidation
which was responsible for forcing the,
share list toward lower levels.
The stock market will likely overdo
it on the downward side just as was
the case on the upward side last year.
The question confronting the man who
buys stocks for rise or sells them for
fall is whether or not stocks in the
steady decline since last November have
fully discounted the period of business
and industrial readjustment now being
experienced. There is chance hore for
debate. Stocks in their decline this
year have fallen anywhere from 20 to
100 points from the top levels of 1919
Certain industrial shares have suffered
much more Severely than others. AS a
result the stock market list offers to-
day many shares which are without a
doubt selling far below asset values.
But few persons are willing to buy
even at these levels because of fear
that the present business unscttlement
will carry considerably further and
react even moro disastrously upon
earnings. This lack of confidence is
largely psychological condition. But
then bull or bear market Is more
or less matter Of psychology.
The Wall Street view at the moment
is we'll expressed by prominent
broker: "Curtailment of speculative
activity seems the first requisite lust
now, and the new trading furor not
only made the banking situation for the
moment more important considera-
tlon, but has to an extent checke Il
necessary movement of new issues to
investors, which has helped in formula
ton by the banks of plans for fall
financing. The man who has the good
of the situation at heart will for the
present discourage unnecessary specu-
iative activity. Great good has been
done by liquidation in commodity mar
kets, for it is possible to figure how
the break in foodstuffs has cut down
probable credit employment for crop
marketing by hundreds of millions"
Banking opinion, despite tho gloom
IN stock market circles, is quite hope
full. Governor Harding, of the Federal
Reserve Board, discussing the credit
situation last week, took g. rather on
timistic view of the outlook for the fall
and went so far as to say that the coun-
try is entering the new crop-moving
season in a much better position than
was anticipated four or five months
ago. This improvement has been due
largely to q better movement of cars
in the Middle West, which has made
possible the shipment to market of last
years carryover of corn and wheat
valued at approximately 100000 900.
This, of course, has meant the release
M bot
is likely that could the present rail-
road congestion be cleared up many
of our current credit problems would
disappear over night.
The National City Bank In Its
August review of financial and eco.
nomic conditions say: "Notwithstand
ing the stringency Of credit and the
heavy price declines that have oc-
Cured in home lines, the situation has
been very free from insovencies. A
lew important houses have been oblige d
to ask for extensions and in sew.
cral instances committees have been
appointed, but in all of these instances
creditors have been satisfied that the
parties were solvent and would be able
to continue business. In some lines
where there has been very rapid ex-
pansion of production, as in silk manu-
facture, good many small, new con.
Germs which started with little capital
have been obliged to cease operations
but their liabilities have not been larre
enough to occasion any disturbance
The general opinion among well-in-
formed people is that the business
structure of the country is far stronger
than at any time of crisis in the past
and that q disturbing number of in
solvencics is not likely to occur. The
most hopeful feature of tho situation
is the fact that the public seems to
be finally impressed that expansion
must stop and that business must be
handled within existing lines of credit
! Expansion has boen so much the order
of the day, and higher wages and
i prices so readily obtained, that it has