Evening star., 1921-07-09
BY STUART p. WEST.

NEW YORK. July s.-while its ul-
innate consequences in the security
market and in outside business have
yet to be tested. the most important
incident of the week is tho Treasury
plan to place a cash sum of $780,
900, 900 at the immediate disposal of
the railroads. The Treasury already
has on hand some $500. 100000. If
Congress votes the remaining $780,
900, 900 with reasonable promptness. it
may easily prove the turning point
in the entire situation.
The object of tho administration is
not only to relieve the carriers. to
enable them hem 70 pay Their debts ID but
new purchases. It 10 quite as much
to help the steel and equipment COM
panies, by procuring Z settlement OF
what is due them and opening up =
fresh source Of busines1 The e0-
pectation is further. that these rail-
their loans at the banks will help
on the liquidation Of frozen credits"
and that the spectacle Of q revival In
these leading industries will afford
confidence to business in general to
60 ahead.
New Buying Encouraged.
There Is no doubt that this weeks
additional steel cuts have brought
prices down to an irreducible mini
mum. Taking into consideration in
creased costs, the new schedules are
lower than those on the average for
the years preceding the war. 1t may
take a little time for buyers Of steel
to satisfy themselves that prices can
not go lower. When they cd. II prec-
ing will set In gradually. and then
spread moro rapidly. It may be that
railway Ysurchases- delayed quite like
ly Tor another month or SO, will be
what turns the tide; Or it may be
building trade. which seems in q
mood to take advantage of the new
steel prices, when 1t can put through
its present program for wage reduc-
ton.
In ordinary times July is !. Waiting
are tho crops and the autumn money
supply. and the markets hold back
until they can get a line on these.
But nobody but theorist could
maintain that the harvest outcome
and the state Of the money market
present situation: The government
crop report has shown an indicated
wheat yield slightly above a year
ago, a corn yield slightly below.
Wheat and corn taken together will,
If anything like the present promise
is maintained, have an out-turn well
above the average. But large crops
are not Of themselves an assurance
Of returning prosperity unless they
can be sold at profitable prices.
Normal Marketing Uneertain.
Whether the recent price recovery
aas been sufficient to induce the farm
ers to send their products to market
in normal fashion remains to be seen.
Their spokesmen in Washington claim
that the recovery IL inadequate, and
they are doing all they can to pass
LEGISLATION to secure the aid Of gov
ernment credit. Then. too. there 10
the large surplus carried over from
last year to consider, likewise the
much smaller dimensions Of the for
eign market. Under these circum-
stances, 1t IL q question whether
good-sized harvests are blessing.
Certainly they do not mean this year,
either to tho trade outlook or to the
Wall street position. what they would
have meant In old times.
AS for money conditions. 1t 10 IN.
conceivable that the security markets
are holding back on this score. A
year ago. with bank loans at their
peak. with production and prices
stretched to the maximum of tnfatton,
with q federal reserve ratio OF ~
per cent and still going down,
there waS every reason for looking to
the autumn months with grave un-
easiness. But now with federal re-