Evening star., 1920-05-29
BETTER CONDITIONS AHEAD
IN FINANCIAL MARKETS
Credit Situation Eases Up-Bond Prices
on Upward Trend-Fears of
Depression Dissipated.

manufacturers whose business is hurt
by the Withholding of their ac-
! customcd bank accommodation are
OF course, crying out that the whole
policy is mistake: that it is inter
! fering with industrial production at
the very time when output should be
stimulated, and that, instead of help
ing to solve the problem of the high
cost of living, it will render the solu-
tion more difficult.
! Chose Lesser Of Evils.
The common sense view is that the
federal reserve heads have chosen by
! far the lesser of two evils. 1t is un-
.o.tanate that industrial production
mas to be decreased. But it is of far
more Importance that the credit strain
be relieved. 1t is better by far to
have temporary letup in business
than to run the risk of a panic which
it would take years for the business
community to recover from. The best
judgment of bankers and financial
authorities, as it has been given to
the public on numerous occasions
during the last week. Is that the
credit difficulties have reached the
peak. that the tension is subsiding
, and that the relief measures plus
the gold importations will put the
banks banks Of the country in a strong
enough position to meet the crop re-
quirements of the summer and ,au-
tumn without any serious results.
1t Is upon this conviction that the
| whole financial situation has turned.
that new buying power has been devel-
| oped. that liquidation of securities has
ceased and that Wall street men have
| come to take a brighter view of the
outlook than they have felt like TAX
+, ing for over six months.
Investments Look Up.
\ 81
ket is undoubtedly headed upward
| Old line railway stocks which even
week ago were unpopular have
| come especially into favor. They are
the ones which stand to benefit par
ticularly by the easing of credit money
on the one hand and the prospect OF
| much higher freight rates on the
Iother. It is reasonably felt that there
are immediate and very promising
possibilities for speculation in the
Jlow-priced non dividend paying rails
| this because of the very forcefu case
| that has been made out at the Inter-
state Commerce Commission hearings
on the side Of higher freight rates
| The financial community has been
particularly impressed with the fig
ures submitted, by which the repre-
| sentatives of the railroads proved
that in most instances where there
had been a valuation on the basis OF
l COStS lHtS WAS SHOW II
by the commissions experts them
selves to be considerably higher than
the valuation represented by proper
ty and investment account. The Su-
preme Court having decided that re-
production costs are the proper
form of rate making. the chances
look better than ever that the roads
will get the maximum increase de-
manded.
With the industrials the coming
| market is likely to be a much more
discriminating one. Stocks which
have distributed stock dividends have
for the most part shot their bolt. So
have stocks of companies whose in
ventories will have to be whitfield
down as part of the commercial re-
adjustment that is in store, and there
is little speculative incentive in the
case of stocks and concerns produc-
ing non essentials. On the other
hand the equipments have a very
bright outlook and so have most of
the gh-grade oils.