The New York herald., 1921-05-09
FINANCIAL NEWS
AND COMMENT
Approach to Normally Causes
Optimism in Business
and Markets.
CONFIDENCE WELL BASED
U. S. Steel's Wage Reduction
and the Cuts in Rediscount
Rate Show Trend.
CONFIDENCE WE'LL BASED


est during the last week one is impressed
with the speed OF the country's return to
normal basis The cumulative efforts
OF the last year to liquidate stocks of
goods. to make wages conform to the
trend of living costs and to strengthen
the bank position are being outlined
rather suddenly, 1t would seem. And
yet there is nothing precipitate and
abrupt about 1t all.
| What has happened of late In case OF
ters decline of wholesale prices. What
has occurred 10 Reserve Bank discount
rates was indicated three months ago,
when 1t was seen that loans at reserve
standing currency was being retired and
gold was accommodating In the reserve
account at the expense OF foreign buyers
OF our goods. who were unable to get suf-
fcient credit here. Developments have
been rapid because they have been dis
cerned in several fields at once, but they
were all the product of steady and per-
sistent forces which began to work as
long ago as last November.
The stock market has been busy re-
cording cheer over current happenings,
as well as discounting the result of present
| phenomena. which were expected three
to six months later The weeks vigorous
bond market undoubtedly betokened the
accumulations of investors, but 1t dis
closed also the operations of far sighted
spectators whose transactions were
shaped by the sure prospect of easing
money costs.
AS to the advance Of 10 to 1S cents a
bushel in quotations of wheat futures,
one is less certain of the controlling
factors, for this is a market where ma
ture counts heavily in the movement of
prices. Yet 1t is fair to assume that cas-
Ing cerdit, coupled with the promise OF
larger exports held forth by rising for
eign exchanges. was OF considerable in
fuence in promoting the recovery.
Outlook Is Much Brighter.
Business and the markets are looking
about with an eye less jaundiced than a
month ago; the expectation of enlarged
industrial operations and expanded sales
at home and abroad has made a mate
rial growth in the last fortnight.
In looking for especial reasons for the
change the observer finds that some are
entirely tangible and concrete. while 9TH
ers are still comprised In sentiment
Confidence--otherwise constructive SEN
timent-has been aided by both the con-
crete and the intangible. OF intangible
factors the chief are these Belief that
in the end Germany will accept the repa-
ration terms and get down to business to
meet them, and, second belief that the
Administration at washinaton Is follow
ing strictly economic lines In handling
difficult problems in the labor and busi-
ness fields.
To refer to concrete items OF recent
application to the Industrial outlook. there
Is need merely to note the undoubted
wide and emphatic influence of the Steel
Corporations reduction OF wages to the
extent OF per cent. JUuSe IdIy Hslu
out long after many of his competitors
had lowered the pay OF their workers. He
was insistent during March and April
that the movement downward of costs
of living had not yet justified lowering
Of wage scales. The emphasis he laid
upon the corporations attitude in these
months makes all the more emphatic in
May the decision to cut
This largest employer Of labor. IT must
be, found that prices and business con-
dtions had united In making fair the
reduction OF the employees return for
his work. There Is no question that
labor everywhere has been impressed
with the corporations action. The bear
Ing which this wage reduction has upon
negotiations between other employers
and their men is obvious. although the
various strikes now under way show
clearly that liquidation of labor In the
remaining period of readjustmcnt cannot
be expected to come about easily. There
remains great test yet in the railroad
situation.