Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-09-25
BY STUART p. WEST.

NEW YORK, September 25.-This
has not been a pleasant week for hold
ers of many of the industrial shares.
1t has been disappointing to those who
set too much store by the better feeling
that pervaded the stock market week
ago. Yet there has been nothing in
the course Of prices to undo the belief
that the greater part Of the share list
struck bottom in the August decline and
that the market since then has been
carefully distinguishing between the
stocks of companies which are in a
relatively favorable business position
and those which are not.
There have been quite a few individ-
ual instances Of stocks going through
their previous low points which have
dustrial depression had not been in their
case sufficiently thorough. This was
true of the leather shares, Of some of
the motors and Of most Of the tire
stocks. The complete passing of the
Central Leather dividend had evidently
not been fully reckoned upon. while the
constant insistance upon the cancellation
by the automobile companies Of orders
for material. along with the sweeping
reduction in prices by the Ford and
Franklin concerns. proved a particularly
severe strain upon the market for the
motor and related Issues
Above Low Levels.
But with these and a few other
exceptions the decline in the indus
trial section has stopped well short
of the low levels of month and a
half ago.
The remarkable buoyancy in the
junior rails and the consistent
strength of the tobaccos and coal
shares-two groups in which the
business position and outlook are
highly favorable-showed that it is
a situation where values count and
where they are able to assert them
selves despite all that is unfavorabfe
in outside surroundings.
Warning was given by all who be-
lieved that the majority of stocks saw
their worst in August that unsettling
were still to be antici-
pated in the movement of general
trade.
The business readjustment which
set in three months ago cannot be
complete until there has been a thor
ough defiation in commodity prices.
and the more rapid this deflation pro-
ceeds the sooner Will the readjust-
ment Ieriod be over.
should he Thorough.
Hence. it is a matter for gratifica-
H.
settling effects. that there should be
no halfway policy about the price
cutting campaign. but that it should
be drastic enough to carry the con-
viction that it will not go much fur
Their. Where manufacturers make con-
cessions grudgingly, where the price
decline is gradual. 1t does not stimu
late buying because the buyers feel
that by holding off they will get bet
ter terms.
But when the producers make up
their minds that there must be a
heavy cut and that 1t should be done
all at once the purpose is much more
apt to be accomplished, for their GUS
toners then feel that the reduction
has been sufficient.
The president Of the American
Wooden Company, which was the pio-
neer in the price-cutting movement,
week afterward that the
plan had been complete success. and
that all the new business desired had
been booked under the new price
schedules.
Cuts In Many Lines.
1t remains to be seen whether the
same prompt success will attend the
price cutting in the cotton goods in
mail order business and in the other
lines where sharp reductions have
been announced So far. despite all
the talk about the steel trade, the
of prices has not struck it
yet. There Is no doubt. however.
that the announcement of lower steel
prices would. after the first shock was
absorbed. be looked upon as an Incl
dent Of the most favorable signif-
canoe because OF the stimulus it
would give to all Industries in which
steel figures as a raw material
The equipment industry is one of
these. The price Of cars and loco
will not come down until the
price of steel does, and while the
price of cars, for example. is four
times what it was before the war, it
with all their great need, are holding
back their purchases of new equip
ment and trying to scrape along by
patching up the old.
On Road to Reduction.
the road to a substantial reduction in
the cost Of living in certain lines
among other things. in the price Of
shoes, clothing, household furnishings
and some articles of'food.
The outlook is fair for a further all
around reduction in wholesale food
prices, but to what extent this will be
radical measures being taken to remedy
the defects of our distributfve system
remains unfortunately a matter Of great
doubt
So, too, the rent problem being a ques-
ton of building activity and this being
chiefly a question of labor cost, 1t is
hard to be at all sanguine upon this
subject. But summing up, It can be