Evening star., 1921-04-02
REFLECTS UNSETTLED STATE
OF BUSINESS GENERALLY
Wall Street Market Moves Without Much
Snap and With the Bears Constantly
Working to Develop Weak Spots.
BY STUART p. WEST.

BY STUART p. WEST.
NEW YORK. April 2.-Little has
happened in the course Of the present
week to affect the essentials of the
financial situation.
1t has to be said, as was said week
ago, that mems opinions are widely
at variance regarding the present busi-
ness position.
Manufacturers of automobiles are de-
cidedly optimistic because their in
dustry has picked up remarkably
within the last month.
Textile mill owners. looking at their
business as compared with what ii
was four months ago. are very con-
f1dent
The same is true of the boot and shoe
and dry goods trades.
On the other hand. the steel men.
when they talk privately about az
fairs, declare that they can see moth
ing encouraging. This is especially
true of the heads of the independent
companies, which are operating on
only about 20 to 80 per cent basis,
and making a much smaller profit
even on this small business, than they
were six months ago.
The big copper mines of the coun-
try have shut down completely and.
while this will hasten the recovery
in copper prices. it is more dra site
remedy than was thought necessary
up to very recently The price of
wheat has tumbled to new low rec
ords and is back to where 1t was in
1916. Other staples are down sim
ilarly and there seems no tnmedfate te
prospect of any improvement, tarin
or no tariff.
Curtafled Buying Power.
This means very plainly a sharp
the agricultural community. which
will make itself felt in all directions.
but particularly among industries
which depend upon the farmers as
customers, such as the agricultural
implement makers and the producers
of fertilizer.
Thus the whole business position
is very much mixed. and this is what
is being reflected in the present stock
market.
Industrial shares have broken this
week on further cutting and passing
Of dividends and in preparation for a
very poor showing in earnings for the
first quarter of the year.
This does not imply that prices at
their December low did not measure
the full losses that have occurred or
are apt to occur in the readtNstment
period. But it does indicate that dur
ing the subsequent rallies in January
and again in the middle of March.
Wall street was figuring upon more
of a trade recovery than has occurred
or than is likely to occur yet awhile.
Therefore, the market has been sensi-
tive to the uncovering OF fresh weak
spots, to the various instances where
readjustment has not been completed.
Pleased Mt Interest.
1t is a source of qualification that
the government at Washington has
become aroused to the necessity of
something being done to solve the
critical problem of the railroads. This
problem is no longer one of permit
ting the roads go earn a falr return on
invested capital
The new railroad act, designed to
accomplish this result. has failed un-
der the test of bad times. 1t has
turned out that rates cannot be raised
sufficient to allow earnings of " to
per cent Of the property valuation.
without seriously hurting the com
merce of the country and producing
an unfavorable reaction upon the
traffic volume itself.
To be sure the January results are
not a fair standard to go by. They
pictured the transportation industry
in the worst possible state. the same
as was the case with other lines OF
trade.
The February statements were not
as bad They showed the effect of the
retrenchment program which the COM
panies have put into effect. and there
is no doubt that the consequences OF
these economies will be reflected still
more forcibly in the figures for March
Relief. But No Cure.
But while the cutting down of work
ing forces will put the railroads. in
better shape to meet the heavy traf-
fic losses, II will by no means be
thorough cure. Rates must come
down, and this is as much to the in
terest of the roads as it is to the
shippers. But rates cannot be low
cred unless wages are lowered, or
else the relation Of expenses to rev.
enue will be even worse than 1t Is
now.
Railway employees have hitherto
adopted the indefensible. illogical po-
sition that where other classes OF
labor are accepting reduced wages.
they alone must be exempt. This at
tftude will have to yield before the
silent body of public opinion which
wants to see the railway problem
solved not because it is so keenly in
terested in investors in railway securi-
ties. and certainly not out OF any
sympathy with the railway execu-
tiyes. but because 1t recognizes, that
q reasonable measure of prosperity
for the railroads is an absolute es-
sential for the well being of business
generally.
The prediction has been ventured
already and may be put out again
that a compromise will be reached
after the question has been threshed
out in Congress and investigated at
length by the Interstate Commerce
Commission and Labor Board. under
which the roads will. agree to a re-
casting downward of rate schedules
and wages will be lowered. not to
the full extent claimed necessary by
the companies, but enough to allow
a respectable margin of profit.
Federal Reserve Rates.
The last report of the Federal Re-
serve Board stated that while credit
liquidation was proceeding, progress
during the last month had been slow.
From this the inference might follow
huf NJ n f,