Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-08-21
Ry STUART p. WEST.

NEW YORK, August 21.-Wan
street opinion is divided as to wheth-
err the rally in the stock market to-
ward the close of the week was SIM
plv rebound from temporarily
oyersoId condition or whether it rep
resented the beginnings of gradual
but lasting turn for the better. one
has to constantly bear in mind that
it is the function of security mar
ket to anticipate. We are not to sup
pose therefore that Wall street will
wait for interest rates to drop and
for reports from the industrial centers
to get brighter before starting In with
it's own improvement.
No matter how bad q credit and
trade situation stock prices are bound
at some stage to reach level Where
they measure the worst.
! There certainly seems good ground
| for believing that such level was
reached at the low figures OF the cur
i rent week. These prices represented
| for the leading speculative issues
| losses of 40 and so points and in a
| few instances losses of 60 to so points
| from the high of last January and
| April. When the comparison is made
with the high prices of last year the
depreciation was considerably great
/ er still.
i DISCOUNTED UnfavOrable Factors.
| 1t is true that profits in many in
| dustrial lines have been coming down
| are extremely high. that the volume
] of business has been curtailed con
ssiderably', that commodity prices
counts But the enormous fall in
stocks has. it must be supposed, dis
| counted these unfavorable features
| For the better established indus
F.; trial stocks it is easy to work out an
asset value Independent of all ques,
| ton of current earnings which would
not be below and in many instances
| would be well above the minimum
| prices seen this week in the share
list. 1t is not easy to detect immedi-
ate signs of Improvement in business
conditions.
The point is made, however. not
ably in the monthly circular OF tht
business interests are now conducting
their affairs on sane and conservative
lines looking to stability instead o!
following the policy which they di'
until recently of doing as much bust
ness as possible at high prices IN or
der to reap abnormal profits.
business on safe Ground.
The meaning of this is that tn
| whole business situation is on muci
safer ground than it was up to three
months ago, and this impression !
strengthened by the important re
| suits achieved in cutting down non
| essential credits. in reducing specu
lation and in readjusting commodit.
| prices.
All through the late winter ant
spring there were many VINO couid no
see how these deflationary measure
could be carried out without bringing
about a crisis. Business was rushini
iahead excitedly. prices were ruling
at dizzy heights and speculation wa
uncommoniy active in all sorts o
commercial lines. These weaknesse
had to be corrected and the credit sit
uation prepared to take care of tn
extra strain of the crop-moving de
mandS.
Men in high places shook thei
heads over this question and did no
|, attempt to conceal their peSsimiSn
over the outcome. Now all this ha
been changed. We have had the as
!, surances of the head of the Fedora
Reserve Board. of the controller o
the currency. of the president of tn
Illinois Savings and Trust Company
of the National Bank of Commerce i
New York and of numerous other un
manned bankers of the west and cas-
THAT the banks are now fully prepare