Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-12-11
BY STUART P. WEST.

NEW YORK, December 1.-The gen.
eral trade news again this week has
been about as bad as it well could
be and no signs are discernible of any
Immediate change for the. better. The
losses which producers of staples.
Manufacturers and merchants have
incurred as the result of the sudden
and violent slump in commodity
prices are Stupenuous. Part of these
losses have been taken, but great
part yet remains and will have to be
taken unless there is some unexpect-
ed and very sharp recovery in prices
or unless federal aid is extended to
those who are now holding back their
products from market on the ground
that selling them for delivery at the
present price levels would mean a
great sacrifice. ..
Thus the nearer future IS still
pretty much clouded. One does not
know all that will happen in case the
growers of grain, the raisers of cot
ton, the wool trade and the tobacco
men, not to speak OF many others, are
forced into liquidating their goods
through inability. to obtain further
credit AS the general volume OF
trade depends upon the country's buy
ing power and this buying power de-
ponds in turn upon the question or
profits or losses, such losses as are
now confronting could not be ab-
sorbed without entailing severe
check upon the business movement
for long time to come.
Velocity Of Slump Indication.
On the other hand, a distinction is
made by most good judges between
the immediate outlook with these
hard problems to solve and the longer
future. Regarding the sequel to the
prevailing period of depression opln-
ion is overwhelmingly optimistic Inc
point is again made. as 1t has peen
right along, that the very velocity OF
the slump in trade and prices is an
indication that it will not be OF long
duration. Moreover, we are undouot-
eddy very far along in the process OF
reimbursement, much nearer the emu
than is commonly realized. When
prices of commodities get down De
low the cost of production. as some
OF the farm staples and some manu-
featured products are now. they can
not well go much lower. The first Ell
feet under such conditions is curtal-
ment of new output. as we are seems
in the case of copper. Any aHiouns
of price cutting would not nave hda
the influence upon the attitude o!
BUYERS that the threat of reduced
production has had in the copper
trade. and already the demand for the
metal for later delivery has aulck-
ened With steel the posit1on, is Jul
.erent, because prices are not Gown
nearly as much: still the trade Joui
maIs renort that while the new scale
If prjces has not brought IN hhuch
fresh buying it has stopped cancella-
ton. and this is a good deal accoih
Dlished. 1t has all along been agreed
that the last thing to pc iiquloa.eu
would be la Dor. and if this assumption
10 true wage reductions, as they have
been announced already and Will con-
tinue to be announced in coming
weeks. should be accepted as part o.
the final stage in the readjustment OF
Industry from a war to a peace oasis'
Market Surface Sorry LOOKING.
The stock market, on its surface,
during the greater part OF the week
Yet the decline, while in many m
stances just as severe as that when
eliminated in. the third week OF NO
vember. has not been anywhere near
as general. Parts of the list nave
displayed increasing resistance OF the
sort that denotes the presence OF srp.
stantial buying There was lot OF
such, buying at the bottom OF the
November break, and ii has come IN
again now. 1t. proceeds from people
of means who are shutting their eyes
and ears to the news and gossip OF
the day and are putting their money
into stocks which they believe to be
selling for much less than they are
really worth. 1t is not true that prices
can keep on going down. indefinitely
until outside conditions improve. the
turn in the market always comes wei!
ahead of the turn outside, ana Y WIN
be so on the present occasion just as
much as on others. What does 1t
matter how bad current earnings
are. or whether dividends. are cut or
passed if stocks have reached level
where the business of their companies
could be closed out entireiy ana the
proceeds distributed for sum that
would equal or exceed the entire mar
ket valuation of the securities? This
is the situation which many members
Of the industrial share list are now
either actually in or are closely ap-
proximating.. 1t is a situation where
market prices are close to or fully
equal to what is known as uquidating
values. When stocks get into such a
position they become insensitive to
the worst of news.
More weak spots Possibly.
All this is not to say that more
weak spots may not still have to be
uncovered. Nor does 1t exclude the
probability that regardless Of the re-
further amount of forced liquidation
may yet have to be accomplished.
The refusal of Congress to lessen the
hardships of the December tax pay
ments, although undoubtedly justified
by the Treasury position. was a Sc
A Vorv .Aftrac,