The Birmingham age-herald., 1920-10-04

The bearsh sentiment has spread un- til it includes every commodity, even iron and steel, which until recently that have adversely affected the price of most other articles. As one very able merchant said, The American people are nation of hystericai extremists in their buying. They put prices far too high by their reckless extrava gance. And now they seem unwilling to spend any thing"
 As a result an enormous vacuum is being created and once sentiment changes they will be in the same posi- tion as the farmers son who did not get much to eat at home and was told by his father when they sat at the boun- tifu1 table of neighbor that he must eat for today and tomorrow, too. Hold on, dad he answered, q ain't got through eating for yesterday yet" The problem is when will the American pub lie commence buying for yesterday?
 Undoubtedly there are a great many people in this country who have been economiZing of late and a smaller num- Der who have been conscentiously try ing to spend as little as possible for the last three or four years. There is there fore great potential though latent de- nand. that must make itself felt as soon
  be far off, for when everyone gets to thinking the same way something is al most sure to happen that will cause revulsion in sentiment. This is as true of the commodity markets as of stock exchange speculation. The time to sell is when there is a mania to buy and the time to buy is when the expectation Of lower prices is universal.
 GOOD TIME TO BUY
 of fp fho hrf but those who now supply their reason able and legitimate needs upon the base of present wholesale prices are not like ly to regret it. They should, however, be sure that the retail prices demanded are based upon replacement rather than cost of values, for there are many retail CTS who are still trying to camouflage the facts and asking more for most goods than they are worth today, while making a big noise over the advertised reductions in one two articles. This intelligent, scrutinous and careful buy jng that is now recommended is in the public interest, as well as in the inter- est of those who need the goods.
 As a large share of the business done pon the New York stock exchange origi- mates with or is controlled by Chicago houses, it may also be worth while noting that the sentiment here is very bearish on the industrial shares and very bulfish on railroad securities. The railroad situation is undoubtedly im- proving, but it is well to bear in mind that the railroads cannot prosper even with the highest rates they are now permitted to charge if the traffic falls -off. as it is sure to do if we are to have a prolonged period of commercial de- pression. It is therefore inconsistent to expect that one-half of the stock mar tLet will go up while the other half goes down, and it will probably be found that it is a mistake to assume that the great industrial corporations of this country are to be ruined or seriously injured be- cause the reaction that they have been expecting and for which most of them have been preparing has arrived. To the detached observer it would seem that in the industrial department of the stock market. as in the commodities, the ex- treme bearishness that now prevails IS unwarranted.
 Next week I shall be in Duluth, Min neapolis and the northwest and will re- port my observations from there. to be supplemented, as this will be, by brief statement of conditions af seen by my news gathering organization in New York.
 SOME ONE TO BE BURNT
 In the east optimists are even fewer in number and ten minutes conversation with most business men is dismal ex- perience. There is a feeling that after crying for the moon of lower cost Of living the country has gotten the sun instead, and that despite the benefice1t, stimulating and energizing effects Of hts rays someone is sure to be burnt where there is so much fire.
 Most of the business news of the week is not of a cheerful nature. Scarcely a commodity has moved upward in opposi- fion to the general reductions, and coffee and steel, sugar and shirts, cotton ana automobiles, and collars and lumber are important among the price declines or the week. Even in the petroleum mar ket rumors of impending cuts are CIT cnlated-- The losses which must be taken on stocks on hand are difficult to calcu-
 BAROMl