Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-12-18
BY STUART p. WEST.

NEW YORK. December 1s.-The |
record of the past week is one OF con-
tinued depression in business. further
cutting and passing of dividends
further wage reductions and little
light thrown upon the question how
and when all this is going to end.
prominent men, all of whom take
the ground that the present read
justment, terribly severe as 1t Is, mas
been necessary, that its duration VIII
not be long and that it will leave
the position Of industry sound and
| the outlook bright. But none OF these
| individuals cares to venture pre-
diction as to how much farther trade
and prices must continue on the
downward path until :he turning
point is reached. It is situation
where the best minds of the bust
ness community are puzzled.
j They all agree that our credit
structure is strong. that there is no
i danger of a collapse and that the
rapidity of the slump during the last
| four months. and especially during
the last month and a half. is the best
| guaranty that it cannot keep on for
long. But where expressions OF opln-
4 ion are very reserved Is on the Ques-
/ ton of what is going to happen DUR
i ing the next few weeks. and par
ticularly after the start OF the new
year.
Retail Trade Respite.
Almost everybody one meets Will
i say that he knows it for fact, that
the retail trade is only being given
a respite over the holidays to give
lit chance to sell as much of its
high-priced stock as it can. and that
afterwards the banks will put on
the screws. So commonly is this
I no yUo11 nF0Ve
to have overshot the mark. Still the
retail trade is the one quarter more
than all others where readJustment
has not kept pace with the progress
elsewhere. The shelves of merchants
3 and distributors must be cleared be-
the mills and factories, and the wheels
) of industry set in motion again.
: The immediate trouble with the
| stock market would seem to be thai
many of what Wall street ailudes
to as the banking interests arr
awaiting the course of events wheI
| it comes to 1iquidating retail estab
L lishments. and are prevented by thii
uluncertainty from accommodating stock
in the large way they ordinaril!
gain prices. There has been n1ucl
fresh uncovering of weak spots dur
ing the last few days on the stool
exchange.
Ii Forced Liquidation.
IL There has been further forced liqui
l dation by people in distress. Ye
there has been nothing like the sam
degree of general weakness that ther
was in the market of the third wee
in December. Much interest has bee
aroused by the similarity Of the down
ward movement of 1920 and that Q
1907. The decline in stocks has bee
l quite as severe, quite as extensive
it was in the twelve months whic
eliminated in the financial crisis {
/ October December thirteen years ag
Moreover, there has been surprisin
correspondence between the NAL
/ | downward swings and the occasions
i rallies of the two periods.
Those who set store by the parall
| Of the two movements SO far, go on
point out that while the general ave
age Of stock exchange prices touch<
l bottom In the latter half OF Decen
ber 1907, it was not until the follow
Il ing February and March that reco'
L cry set in. The first half Of 1908 W,
III a season of dullness in Wall street.
well as outside. but an upwardmo
ment was set in motion which gain.
| Ill In momentum until it resulted In u
III great railway boom OF the SUNNI
ana aunpmn Of 1903.
Ill The recollection of what happen
/ after 1907 is decidedly interesting a.
II
/ present situation Stin 1t has to be I
membered that there are wide dine
| ences between present conditions a
those of this former time.
ia No Money Stringency.
III There has not been, nor will the
be, any acute money strfngency. a
| banking crisis like there was In
closing months Of the panic We
lJlWe know this now by the way
federal reserve system has been al
Itto preserve its reserve ratio throu
the strain of the last three mont
and we know 1t. too, by the evider
that, while just as firm hand
being kept, on credit expansion.
money supply is easing. and after
first of the year the fall in inter
rates, already begun, will become s
imore pronounced.
On the other hand. commercial c<
Editions are worse now than they W
Hin 1907 The losses in agricultl
are a feature which was not pres
then. the losses in Industrial lii
tlhave been far more widespread a
severe. Therefore, it would natura
seem that It will take business lonl
N to recover than it did on the past
casion, and this Is something WI
I'll the security markets Will nave
take into account.
In the midst Of the preponderat'
sentfment Of uncertainty and une
===--[-