Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-07-03
OUTLOOK OF last
/ LAP OF 1920 GOOD
First. Six Months of Current
Year One of continu-
Gus Worry

d. Nev York, July 3.--Wall street by
tbo indulgence of the governors of the
stock Exchange took an extra day off,
, .rd with the Independence holiday on
Monday, business In the market world
ril, be suspended until Tuesday morn
Inc, with the exception Of the Chicago
poard of Trade which remained open,
but will close on Monday. All the
banks. trust companies and other
financial institutions were open for
business as usual today, but they like
wise will suspend business on Mon
day.
The holiday which Wall street Is
taking also marks the end OF the hrst
half of the year. The first SIX months
NJ 1920 were anything but encouraging
60 tbc market world. To the contrary,
measured M m by the pronounced deprecia-
zion Of market values. were discon-
certing period. The unsettlement,
however. was not alone confined to the
market world, but extended virtually
10 ali avenues Of industry, commerce
and finance. It marked the transition
from a period Of imitation to one OF de-
fat;on. II was the effort to accom-
ni;sh the latter which upset the apple
cart. r..
financial viewpoint has been skating on
mighty thin Ice and Developments OIL
recent months have disclosed conclusive
ly that, although we were IN very
ticklish position, there was virtually no
room nor much Of the irresponsible pre-,
dictions Of bad smashup before the fall
are not vet out Of the woods, and should
something slip, things might become un-
pleasant. Still there are many reasons
Tor believing the situation Is well IN
hand. In truth, many OF the recog, !,
nized Judges are Of the opinion the real
crisis has passed, although the patient
still requires prolonged period OF
careful and scientific nursing.
Annals Of Wall street show that the
stock market never waits for the reall :
cation of an event or condition. ~
starts to foreshadow it months ahead OF
its consummation. OF course, every
close student of the situation recognizes
the abnormal high interest rates ex
acted for money would alone account
for the wide depreciation. Money, IKE
water, always finds its level, and 1t Is
tut Sulut Will tHt uNNiubS ~ '>'>-
securities. When there is plethora oi
loanable funds the prices Of securities
rise to level commensurate with the
earning power Of money. Likewise
when loaning rates ascend to lofty
levels, security values accordingly sink
to level where the investment return
equalizes the parity Of the interest
rates.
BY reason of extravagant specula
tion in all forms, as a consequent Of tn,
world war, the efforts to readjust the
seriously strained credit situation have
required q great deal of skill and tact
in order not to bring about a seriou,
dsarrangement of tender fabric oi
the country's credit position. Th'
progress, it Is true, has been slow, but
the rigid enforcement of the embargo
against all unessential loans has served
TO curb the further spread Of the dan
gerous speculation and imitation, ant
brought the country at large down tt
earth.
As the corrective steps taken las
fall were not productive Of the desired
results, naturally more stringent ant
drastic steps were applied, and which
have been constantly in force during tn,
entire first half Of the current year
This resulted in the practical with
drawal of funds for stock market pur'
poses. Time funds during the six months
for most of the time were virtual,
unobtainable, even at bids OF s to
per cent.
Wall street during the six months, OF
at least during the greater part of tina
period, was compelled to do business en-
tirely in call or demand loans. In otheI
words, in day to day borrowing. Rates
aVonta1 fop thiu dot tinn
anywhere from to II per cent, ant
it would be fair to state that the aver
age has been close to s per cent. Sucl
prohibitive rates naturally had one re
suit. 1t cut speculative activity down /,
the lowest minimum experienced in Wal
street In many years. 1t produced
thorough liquidation of speculative ac
counts, and the corresponding reduction
In brokers' loans. which today ar
about the smallest in the history Of tn,
street.
The corrective measures were ap
piled also to the commodity markets
and elsewhere, where the speculative
spirit Of initiation had run rampant
Business has felt the pinch, and al
ready has had its effects in curtailin,
operations. The progress of the deflatiol
policy was seriously interrupted an,
'"hu'apptu- ny IcusVH OI lne pro
tracted strikes of the railroad men an,
the tie-up Of the transportation in
dustry. This has naturally seriousl,
blocked the curtailment of outstandinl
commercial loans, by reason of the in
ability to ship finished products or oh
tain the necessary raw materials.
All Of this, Of course, Is to n larg
extent past history now, and it's presen
ana future effects have been measured
and weighed by the prolonged decline i,
security values. Under the circum
stances 1t would seem to be altogethe
safe to say that the second half of 1922
opens under much more propitious pros
poets than did the first half of th
year. Unless some unforeseen disaste
occurs, it Is altogether reasonable t.
look, in so far as the stock market |
concerned, for much improved condi
lions during the next six months. Som
say saG no one will ever see the prices o
iio2O again. 1t looks in many ways a
IL thls is a safe bet.