The New York herald., 1921-08-22
FINANCIAL NEWS
AND COMMENT
Readjustment Of All Business
Lines to Normal Basis Is
Not Completed.
INDUSTRIALS MOVE DOWN
Bond Market Strong but Of
ferings Are Small-U. S.
Steel Cuts Wages.
INDUsTRIALS MOVE DOWN

| 1t Is difficult to get a composite pic
ture of the industrial situation-in fact,
1t is mpossible-because although read
justments evidently have been made IN
certain departments many others stsll
are confronted by obstacles in the road
to normal business basis. The secur
ity markets have been depicting that
dustrial stocks belying the promise of
the June recovery. turned reactionary in
July. and have continued an irregular
downward trend thus far in August.
Bonds. on the other hand, being influ-
enced by plain evidences OF relaxing
monsy and credit rates, and. through
those factors, being affected only re-
motely by manufacturing and trade.
have displayed fairly consistent
strength. attested TO by a dearth of Of
ferings when investors seek to buy.
This latest sign of delayed readjust-
ment was contained last week In the
United States Steel Corporations de-
cision to reduce Its common labor wage
hPP4OAihhNSiy 40 pSk NShN Ahal iOauC-
tion was the company's third one Of the
year. but, actually. was no more than
an evening up Of It's wage scale with the
scales of many competing companies,
and was not altogether surprising. 1t was
a step In realigning operating costs
with selling prices. But thu cut comes
at the moment when pig iron prices are
recovering. advances of so cents to So a
ton being reported in the last ten days.
and when consumers of particular prod
ucts are beginning to place orders which
had been held back for a long time.
The cut was ordered just as comment
on the scarcity of warehouse stocks OF
steel was being heard The reduction
occurred when the general level of steel
prices was displaying more stability
than had been reported for three
months.
Situation I'm Steel.
The situation Of the steel trade Is
somewhat different from that of tex
tiles, leather and building construction
materials. The prices for the last
named group had broken sharply. had
been heading downward for at least five
months before much was being SAID
about a reaction of steel quotations.
Thus, being practically the last TO fall,
steel prices and wages appear to be
among the last to record degree of
equilibrium. And 1t Is likely that. once
steel prices become established at a
level which consumers decide is close
to bed rock. a revival of business will
occur that will reach out and connect
| lonse ends OF markets air sady on tho
| way to better basis. Whether this
definite turning point will be reached
without additional wage revision. OF
course, remains to be seen.
Business has less and less to worry
about In respect to the money outlook
as time passes. A year ago the sea-
sonal crop demands, coming on top OF
the persistent demand caused then by
over extended business. made circulating
Reserve notes expand $54. 900 In the
first three weeks of August. At the
same time. for the same reason, redis-
counts Qoans made by member banks at
Reserve banks) increased no less than
s127 .Ss9. 900. Money rates were stiff. In
the corresponding period OF August of
this year the circulating notes have
declined s33.s75 900 and red1scounts have
fallen si3s, $1,000
In that record We have an accurate
survey Of what is going on. Although
loans are receding and circulation be-
ing retired because OF slackened use OF
credit and money In business. the proc
ess is surely paving tho way for that
period when reawakened industry and
trade Will have relatively cheap credit
In abundance to call on. Although there
has been recently strain in particular
places Of the credit structure. the facts
Of tho bank statements from one week
to the next are assurance that no seri-
Gus banking difficulty Is possible.
Stock Market Conditions.
The precedents of prewar years in
many ItspeClS were destroyed SO COM
pletely by the war that one wonders
whether one OF the best known ones and
one most faithfully believed in. lodged
in the stock market, also has gone over
board. This applies to the once estab-
hshed fact that the movements OF prices
discounted by six or eight months the
great swings in business and trade.
Several industrial companies. shares of
which are actively dealt in. are shown
by their figures OF earnings to have
turned the corner. The railroads. helped
/ by the reduction of wages which went
into effect on July ]. are beginning to
disclose the results in marked declines
\ Of operating costs. But the stocks OF
manufacturing companies. which are
making their dividends and a good sur
plus over, have shown very little more
recuperation than others, dividends of