Evening star., 1920-06-05
CONDITIONS ENCOURAGING; :-:#
NO UNFAVORABLE INFLUENCE
Nomination of Radical at Chicago Would
Be Unfortunate States Position
Compared With Great Britain's.

serve ratio fell from above IS per
cent to "a. which meant that IL was
down again almost to the record low
of the war period. Yet IL we may
judge from the cable reports the Lon
don stock market. except in some in
rather weak, has gone on its courSe
Serenely.
There has certainly been no gen
eral liquidating movement: on the
contrary most departments of the
London Stock Exchange have been
steady to strong. 1t is a positive fact
that there has been far more pessi-
mistic talk by reckless and irresponsi-
BILE persons in this country with our
AZ per cent reserve ratio than there
has been in England with it's 13 per
cent ratio.
Bonds Not As Firm. ai~
Liberty bonds and the bond list in
general did not succeed in holding
their rapid advance of the previolis
week. They have had what may be
regarded a normal reaction from
the top. There is no reason on this
account to change the view that bond
prices struck bottom toward the end
! of last month. but everybody realizes
that money rates will have to come
down more than they have before
| there will be room for any large and
| sustained advance in bonds and other
securities of fixed yield
Then, too, as is quite we'll appre-
ciated. the constant output of new
lshort-term bonds and notes at high
interest rates provides a formidable
competition for the older securities
and tends to keep their prices down
1t is gratifying in one way to see
so large an Offering as the $4,000 900
Belgian loan go SO well. 1t is a proof
| of the presence of a large volume Of
inv -tr1,n ont s,y,tt t.l
when the terms are made sufficiently
attractive. but the Belgian flotation
with it's lottery feature-namely,, the
provision for retiring $2.000.000 each
year at S115-haS diverted to itself a
good deal of money invested in other
securities and has not been good
| thing for the market in the recently
created equipment notes.
Motors and Oils in Demand. 49,,
The stock market. what little there has
been of it. has fulfilled the expectation
that it will be very discriminating
one. Shares of equipment companies and
| high-grade oils have given the best ac-
count of themselves for reasons with
which the public is thoroughly familiar
The makers of cars and locomotives
will be pushed to the limit of, their
capacity for the next year and a half
| to two years. in order to make up the
shortage in transportation facilities,
about which so much is being said now
| adays. There is similar acute scarcity
| in the production of oil.
Low priced rails are still in high, ga
| vor because of the possibilities which
| they will have under increased freight
rates.
On the other hand the stocks of COM
panies which have inventories to marx
| down or which are confronted with the
Likelihood of much reduced profits, are
not attracting such speculative interest.
F, Still we have to observe that even in
this category stocks like the Leathers
and American Wool have stopped going
down.
Discounting Everything. .5.
The action of American Wool shares
| in the face of the reports of sIackenel
! production and partial shutdown of
plants and in the face also of the govern
| ment prosecution on the profiteerinr
charge, should be an object lesson to
the most bearish that stock prices can
eventually reach a level where they
| measure the very worst that has hap-
| pened or is likely to happen in the in
dustrial situation.