The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-11-29
Cause for Th9nksgiving.


But the Thanksgiving recess brought
! home to experienced traders the fact
that the Stock Exchange had much to
be grateful for in that the financial
! situation was not more involved than ii
| was and that our banking system had
stood the test of credit strain and high
Foney rates extremely well. Foreign
markets moved much as did our own
and, although there were signs of in
vestment activity in some quarters, the
effort to revive speculative enthusiasm
on a large scale in response to the news
that a huge block of General Motors
stock had passed into very strong hands
fell flat. The public Is not in the mood
to speculate in any large way and banks
are not inclined to finance a resumption
of speculative activity on large scale,
even If they possessed a sufficient re-
serve to make it safe for them to do so
without detriment to other borrowers.
The outstanding fact Is that the closing
weeks of this high money year is scarcely
time to start the speculative ball roll
ing again and that many banks are find
ing 1t necessary, in addition to satisfy
ing ordinary year end demands. to make
large advances to customers connected
with foreign trade operations
Improved Conditions.
Those demands have made it impossi-
BILE for large financial institutions to
take on securities that they would like
TO invest in at the attractive price level
still prevailing in Thea market for first
grade bonds But the strain is lessening
and slowly but surely the markets are
recovering from serious complications of
the war period The whole country is
revising its merchandise prices, in order
60 -. Il IL. L.
pie will buy again in quantity. 1t is a
buyers market instead of a sellers
market and many manufacturers are
Offering large inducements to enable
them to convert large stocks into cash
Such has come to be the aim of far
sighted business men. because the one
compelling lesson brought home by the
complications Of the reconstruction
period, has been the usefulness of
heavy cash balance.
Price reductions are still the rule in
most communities and there is reason
TO believe that the movement will re-
ceive fresh impetus after the holidays
and merchants are forced to conciliate
the consumer in all lines. Heavy losses
are being taken by large retailers, who
made sufficient profits during the period
of rush buying to more than compen-
safe them for the concessions which
must be made at this time in order to
get the public to purchase merchandise
I'm quantity. 1t is an interesting process
and although there are some stubborn
sellers who will not act until the banks
force their hands. most retail establish
ments are seeing the wisdom OF an
nouncing reductions and special sales in
order to convert their large merchan-
disc stocks into comfortable cash bal
ances.
solid Ground.
The average price level fell some 40
per cent. within the nine months ended
on November /. and the cost of living
is no longer the burden that It once
was The country is getting on a solid
basis again and with the lower mer-
chandise prices the cost of financing
day-to-day business presents less OF
problem. The dehation process is maxi
ing Roadway everywhere and there is
no longer the inflated price level TO be
considered IN reckoning with the longer
future. It is a change OF large signih-
canoe and means that the country is
headed toward better things and that
the people will benefit from the conserv-
atism which the country is showing af-
ter a long interval Of doubt and uncer-
tainty Dividends. reduced or aban-
doned, extravagant habits that the peo-
pie have given UP and numerous fam
lily economies introduced are incidents
in the development of n lower operating
expense ratio shown by families, cor
porations and public utilities. The
American people are apt to go TO ex-
tremcs and in some industries IL Is clear
that prices have been reduced about as
low as they are likely to go. But the
movement. az whole. will persist be-
cause merchandise prices are still In
many cases so 10 IS per cent more than
those quoted in 1913
Increased Conservation.
The year just ending has been one OF
such perplexlty as 10 make IL necessary
for home and foreign markets to keep
liquid and strong. Some municipalities
t,,,,. ma DO outlaws for ponnrpductfya Inn