Omaha daily bee., 1920-12-13
Financial
CHE Nem D ork Gimes.
By ALEXANDER DANA MOVES

BY ALEXANDER DANA MOVES
Chicago Tribune-Oma Bee Leased Wire.
New York, Dec, l2.-Sucb doubt
and disappointment as prevailed last
week in the financial community
arose mainly from the fact that the
tension on credit had appreciably
relaxed, that urgent Wall street
liquidation 10 escape disaster had
apparently ended with November,
that even the large SPECTATORS for
the decline had begun to repurchase
securities and merchandise, and yet
that prices continued to fall rapidly
on the Stock Exchange. Payment
this week of fully $600,000,000 on
the income taxes, coming together
with heavy short term borrowing by
the government, and preceding by
cnly a fortnight or so the trouble
some year-end settlements, would
under any circumstances prevent
such aggressive support OF other
markets as would require the use OF
credit.
If the financial markets had mere
ly stood still as a consequence OF
this condition, they would repeat the
attitude taken in a busy December
money situation on many previous
occasions. But, the character OF the
weakness in present months markets
makes the matter more perplexing.
Events of the past two years have
proved that prices are largely a re-
sult of the buying and selling COM
munity's imagination, which may
carry them for long time and hold
them at level which the result
shows to have been unwarrantably
high.
Warning Given.
We know now that the great November
collapse on the Stock Exchange In 1917
correctly foreshadowed the Tightening OF
credit and the severe preliminary reaction
in commodity markets which came IN the
next four months. The attempt at renew
al of stock speculation for the rise last
March might be regarded as an advance
notice of the attempt by merchants and
producers, in the two or three ensuing
months, to hold back their goods and put
prices up again after the first sop had teen
thrown TO retail purchasers. The violent
| markets warning of what was destined to
happen with industry and industrial prices
in the autumn.
The economic readjustment has assumed
a scope which nobody predicted, even
those who were most skeptical after the
inflated prices of merchandise of IL months
ago. Bradstreets estimate that so per
cent of the rise In average commodity
prices In this country between July, 1914,
| and the early months of 1920 has been
cancelled by the decline Of the past nine
| months.
Advance in Average.
Between ths outbreak of the war and
| had risen 116 per cent, but between Nov
Member. 1913, and the high point of 1896
1t had been put UP 10 per cent further,
| and the present months average is only
back at that of December. 1916. which was
not more than 81 per cent above July.
| 1914.
| What has actually been happening this
| year is the readjustment of prices from
| the artificial basis of our own war ac-
| tivities, combined with the downfall OF
| the monstrous credit initiation which be-
| gan when the war was over, war orders
| withdrawn, and the whole world poorer
| for the four years waste and destruction
Thanks largely to the reserve boards
| timely warnings and restrictions we have
| escaped the great financial crisis; but to
! community could escape also a very greai
| part of the distress and forced liquida-
| ton which used to follow one Of our old
| fashioned panics was to indulge In de-
| lusion unwafranted by any previous ex'
|