Evening star., 1920-11-27
M STUART r. WEST.

NEW York, November s7-The
stock market steadying itself after
last weeks virtual collapse, has still
been moving this week under con-
fictins impulses. It has had the un-
n,istakable proofs Of easing money
to, help hold it up. and 1t has had
further evidences of readjustment In
commodity prices to help pull 1t
down.
As a result there has been much
confusion in the movement from day
today, giving rise to much divergence
of opinion over the immediate situa-
tion.
There are certain things. however.
upon which nearly all good judges
are agreed. First, we are very Tar
along with the process Of business
defiafion. Second. we are still farther
along with the discounting OF .rh,ns tnis
dedation in security prices, Iniro,
while some unpleasant developments
in the commercial world may ne
ahead, there is to be no commerclai
or financial crisis Fourth, the credit
structure has successfully passed
nrh tho ordeal, and from now on
will be steadily on the mend Fifth
money rates have come down 70 stay.
barring perhaps one or TWO nurfieS
due to the temporary withdrawal OF
ceptional demands like those at the
year end.
DeAatisn in Grain and Cotton.
The main ground Of contention is
not the longer future about which al
most everybody feels reasonably as
sured. 1t is regarding what is to nap
pen during the next few months IN
Sr~hn 1,nr
market at its tremendously reduced
level is sufficiently hardened to be
able to stand up against. really pad
news. Certain classes Of the business
community have not yet made up their
minds to take their losses. One OF
these is the multitude of farmers who
are holding back their product from
market hoping against nope tnat
wheat and cotton Will rally enough
to enable them to get out somewhere
on for very long. because the banks
cannot be expected to forever stand
in the breach and advance credit on
what Is greatly depreciated collateral
The continued decline IN the. gram
son that the efforts to bring about
price recovery by holding up the sale
OF these products are not succeeding
and are not. going to succeed. 1t
rather looks as II the farmers are
thing IN the way OF help. and are de-
laying action on this chance.
Must Continue.
When the statement is made that
commercial liquidation must continue
the reference is chiefly to the agricut-
tural, interests on the one hand. and
to the retail trade on the others.
Retail prices have come down very
little in proportion to wholesale
prices. Just as the farmers are hold
ing on in the desperate hope of legis-
lative aid.- 50 the, retailers are post
poning their price cutting. hoping to
work of lot of. their high-priced
The impression is that the banks
which are lending money to the, re-
tailerss win be patient until Christ
mas Is passed and that then they will
put the screws on. 81
It will be in the first few months
OF 1921 that the last phases OF the
price adjustment and liquidation. in
Industrial lines will probably be wit
messed. Then, when everything is
down to rock bottom. there will be
IL precedent Is followed. an interval
Of relative stagnaton, thus postpon-
ing the beginning of trade recovery
until the second half of next year.
This Is the prognosis which repre-
sentative men Of affairs are now pri-
vately making.
tion Is different simply because Wall
street regularly moves from six to
nine months ahead of trade. The
GATE Of recovery for stocks must. il
past experience counts at all, be fixed
considerably ahead Of the turn for the
better in commercial lines. The proba-
bilities are that many stocks have
already seen their low points: at least
they have got down to prices where
substantial buying for inside and out
side Investment account have been
freely attracted. There are other
stocks which may not have yet fully
completed their revision because they
represent industries where the price
cutting will have TO be carried fur
ther.
Railway shares were rather over
bought In September and October. but
have since borne their portion Of the
liquidation and are most Of them in
a sound position. The railroads will
lose in their gross by the business
reaction and by the interference with
the. marketing Of grain and cotton.
but they will gain as much. IL not
more. by the reduction of prices Of
materials and supplies and by the
economies in working forces which
are now being put into effect.
Ne Lever Rates.
There was some expectation that
the federal reserve authorities at
their meeting this week would have
lowered their schedule Of discount
charges. 1t was pointed out. however.
that there was no purpose in doing
this while the private rates on COM
mercial bills were still above the
bank rates.
A fall in commercial discounts. it
IS believed. cannot be much longer
delayed. Time money has come down,