Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-08-28
VITAL INFLUENCES FAVOR ABLE
TO BETTER CONDITIONS
Bond Market First to Reflect Partial Pass
ing of Factors Causing Uneasiness-No
Industrial Crisis Likely at Present.

record as saying that credit expan-
sion has been checked that while
IoahS 10 productive enterprises have
| not peen curtailed loans to less es-
sehtlai Undertakings have been cut
down and that through these meas
ures the way has been cleared to
meet without difficulty the extra de-
mands OF harvest time
| me prediction has been ventured
that the banks belonging to the fed
e ertrs service system have gone to an
extreme In their refusal to put out
money IN time of loans and that when
the crop-moving needs have been met
lese banks will find themselves with
l. surplus OF time money on hand
W ~ tney will have difficulty to lend.
with conditions the way they are now.
but 1t represents the Judgment of
more IMAM one competent observer.
Bond Market Feature.
One cannot get away from the spec
| tacle which the Investment bond
market has been offering for the last
two months, and especially for the last
| two Weeks-a constant expansion in
the volume Of business done and a
| steady and even rapid advance in
prices. 1t was the bond market which
, reflected the credit tension and the
accompanying abnormal interest rates
for very long period before it de-
veloped.
1t is to the bond market therefore
| that We should first look for the an
ticipation of easier money conditions
and the story of the bond market
since the early part of June has been
an advance OF tive to ten points in
less substantial gain in other descrip-
tons and an eager absorption of all
hlgh-claSS new issues coming out.
The only possible meaning to assign
to this is that the investment community
realizes that bonds have been selling
on the bargain counter, that there
will never be another such opportuni-
ty in a lifetime to invest in the
safest sort of securities on anywhere
from to 7ls per cent basis. and final
ly that the next change in interest
rates will not be upward but down.
ward.
On Indn. rial Situation.
In a statement issued during the week
Gov. Harding of the Federal Reserve
REIMBURSEMENT through which the bust
ness world Is passing would be shorter
and less severe in Its consequences than
the normal transition Of the same sort
in the past.
The reason for this lies in the fact
shortage of essential commodities,
whereas on former occasions OF CONNER
cial reaction there was an overwhelm-
ing surplus.
ihts. we believe, hits the nail on the
head in describing the. difference be-
tween the present situation and that
of other years when industry has been
depressed. Yet it Is nothing more than
restAting in another form what those
who refuse to be unduly pessimistic
have said right along. namely, that there
could be no serious industrial crisis
where there was no overproduction of
goods and where there was a deficiency
of labor.
OF merchandise and foodstuffs at losing
prices and widespread unemployment
have been the primary characteristics of
all panic years of the past and it il
precisely the reverse of these features
that we have had in 1920.
Copyright. 1920. by s. p West)