The Washington herald., 1920-08-08
Foreign Situation Renders
: 1t Impossible to Make Fa-
vorable Deductions.
TRADERS NONPLUSSED
Commercial Interests oi
Country Lack Effort to
Curtail Activities.

Ihere was Dy no means unanlm-
ity of opinion regarding the out
look for the stock market after the
close of business on Friday, some
Of the most careful observers of the
foreign situation taking the posi-
tion that reports from the Russian
Polish front were such as to pre-
vent the development of any feeling
of enthusiasm in this country. One
prominent international banker said
that there were so many possibili-
ties in connection with the foreign
situation that it would be impossi-
bic to make any deductions of a
favorable character at the moment.
1t is admitted that this element
may undergo a decided change for
the better on comparatively short
notice, but this banker was of the
opinion that haste should not be
entertained in the matter of enter
ing the securities markets on an
extensive scale until something
more definite has been determined
in the matter.
Attention is called to the lack of
effort on the part of commercial in
terests in this country to bring
about much needed curtailment of
activities, and until such time as
something substantial has been aC-
complished along these lines there
unpuestionably will obtain an ur-
gent demand for money which in
turn will prevent the establishment
of broad and active stock market
improvement. Gradually the desired
denatton commercially is being ac-
complished, but some well-informed
bankers profess to believe that be-
fore a real turn in this direction
actually develops there must take
place a sharp decline in commodity
values and this naturally will not
occur without the accompaniment
Of a panicky condition. 1t was
pointed out that in periods in the
past when an effort has been made
to maintain a fictitious position in
the commodity markets the ulti-
mate outcome has been a sharp de-
cline before the actual rectifying
measures are effectively approached.
Opinions Differ.
On the other hand, there is
group in Wall Street which does not
share this belief to any extent and
this element is recommending the
purchase of securities. Admittedly,
there are many real bargains in the
stock and bond markets and it is
foregone conclusion that those hav-
ing available funds eventually will
make a good deal of money through
the purchase of stocks at current
quotations. Purchases. however, it
is insisted, shOuld be made with ex-
treme conservatism. 1t was report
ed in stock market circles after the
close Of business on Friday that
there had been excellent scale buy
ing CT a number of important issues
on the receding quotations which
have taken place since the close of
business last Saturday. In periods
Of stock market depression, how
ever, the state of the public mind
has more to do with the course of
prices than the actual intrinsic
value possessed by this, that or the
other stock. Therefore, when the
hquidating movement which ac-
tually took place during the past
week got underway, practically the
entire lot suffered as a result, ire
sPeCtive of the earning position of
the corporations thus represented.
The oil stocks under leadership of
Middle States sustained the most Sc
we're declines, carrying many of
them down to new low record quo
tations, and only feeble recoveries
took place up to the close of the
week. The group which turned
bullish during the week which con-
stituted some of the most conserva-
tive brokerage houses of the street,
advanced the contention that in the
face of the unusually heavy losses
sustained the market was a pur-
chase on general principles alone,
Il for no other reason. This, how
ever, is rot good logic, notwith-
standing that on many occasions
those who have entered the market
on this theory have realized a hand
some profit en- commitments thus
entertained