Evening star., 1921-06-12
BY I. A. FLEMING.

There has been much disappofnt-
ment at the continued passing of div
idends and declines in stocks. but tho
! general feeling is that this essential
| liquidation. the near final unloading
: of the last ditch" security holders,
who have declared their intention to
hold to the bitter end. and who, see
! ing that bitter end coming nearer
and nearer. have at length decided to
save part of their money-reduca
their losses. in other words.
/ Not all the dividends that are being
cut and passed are of necessity forced
/; action 1t is a wise corporation that
can finance itself and doesn't have
to go to the banks too often or for
| If it is a lean year for business, 1t
will be a lean year for corporations.
F.; In prosperity many of them were
j reckless in putting out new securi-
ties, and new securities add to fixed
charges in most amazing manner.
III necessary to conserve the share
holders property, 1t is much better
for the corporations directors to pass
a dividend, or cut 1t, that it may be
stronger in cash
. Many dividends are cut and passed
I because there is no help for lit has
not been earned. Not only that, but
1he fixed charges. the payment, of in
tereSt to the creditors OF the corpo-
ration, has not been earned
In condition of this kind the d.
rectors. if they have been conserva-
tive and careful. may pass or cut the
dividend without conjunction, but If
they have been reckless it may jar
the sense of moral responsibility.
1t may be that some of these cor
porations may be forced to go
through a reorganization and in it
get down to hard rock basis, but it
is better for shareholders to know
the worst than to be lulled into Sc
curity, only to wake up some morn
ing TO realize the appointment OF a
receiver.
Money has been decidedly easier
during the week, despite the large
movement of money incident to the
=, 18th instant, when thesecond INSTALL
anent OF income taxes must be paid.
when millions of interest and Treas
ury certificates mature and when
$500, 10000 new government securi-
ties are about to be marketed.
Some writers refer to the easier
money conditions as a market in
Auece-
AS real matter of fact money Is
not the cause of the present depres-
sion in stocks, nor yet for the exist
ing conditions in business. save as 1t
applies to the agricultural COM
munity, where the Shortness in cash
is restricting buying; to the unem-
ployed and more than all else to the
foreign situation
Adjustment going on in the rail-
roads is full of promise. Wage re-
dlctions are progressing all over
the country, especially where col
lective bargaining has not to De
reckoned with. and where it has ne
gouations are very generally on for
the needed reductions that the cost OF
living may be brought down.
Big sellers of little things and OF
larger and more important articles
at moderate prices report that their
business is steadily decreasing.
The buyers strike is still on, with
some loosening of the pursestrings.
and it is also a fact that the public
taste has passed from the era OF
1uxuries to the era of necessities.
Reference has been made in this
column TO the enormous fiotation of
foreign securities in this market,
until there has again developed a
stage of undigested securities. as q
result of these and domestic issues.
The proceeds of foreign securities
mark keted here are not used in the
slightest toward advancing our own
industrial interestS-that is. no part
of the proceeds are used for tho pur-
chase of either raw or finished prod
pcts.
In every section of the country
financial men are considering what
they can do to advance the sale of
products. to the upbuilding of for
eign trade. to the disposition of the
surplus production, the need Of in
creased production and the employ
ment of American effort.
1t is encouraging to find that the ad-
miniStration will take hand In this
security business. Bankers and bank
ing syndicates. with sure profits, hesi-
tated to give approval to such action,
but no more loans to foreign govern
ments will be made until the ap-
proval of the administration has been
secured
Nor will the cooperation between
the government and the bankers
carry any assurance of the venture.
A conference between bankers and
the administration to discuss the
laIterS policy on business and hnan-
cial matters will be held in the near
future, with western bankers being
given ample opportunity to be heard.
Naturally the viewpoint of western
financial interests will vary somewhat
from that of the eastern contingent
as the former are not prominent in
know the needs of the great farming
and cattle raising sections
These Harding gatherings with I'M
portant men in the business world aro
salvation of the country. through
combined effort 1t cannot be 40
complished in a month or year. 1t
took five years of imitation. of high
prices, reckless spending and junk
ing of the railroad systemsof the
country to create the conditions
that led to defation and hard
times, and 1t will take months and.
mayhap, years to bring it back to
normal.
President Harding but follows the
example of many illustrious predeces-
sors in his business discussions, and
it is evident that he Is SO much In
earnest that he will nnd a way, and
the whole strength and resources OF
the government will be placed back
of it when assured that it has been
found.
Secretary Mellon has displayed fnan-
cia1 ability not unexpected in the $780,
100000 note and certificate Offering.
although it seems he has been over
generous in the rate of interest on
the three-year notes. 1t is the initial
effort to avoid the constant issuance
and reissuance of Treasury certih-
Gates, and it may be taken as an as
surance that, in the event of this
issue being successful. and there il no
doubt about that, a larger one and
at lower rate will be marketed be-
fore the summer wanes.
In evidence of the statement made
regarding the condition of money and
relative ease in rates, etc, 1t is more
evident now than ever that the in
Wall street and into the avenues of
safety, where the solidity of the in
vestmenN Is made the chief study In
placing funds and the return there
from secondary consideration.
This recalls the statement made by
q corporation manager a few days
ago. that his concern was sailing close
a. tho ufnd. that he rec0Rnized the