The Washington herald., 1921-08-28
STOCKS REFLECT
CONTINUATION OF
PREVAILING TONE
Prices Sound Vulnerable
ity of the Exchanges
Position.
BONDS HOLD FIRM
Movements Hold no Signifi-
canoe in Relation to Gen
eral Economic Situation.
BONDS HOLD FIRM
3. by WALTER n. BROWN,
editor New York Commercially

NE bNo"
editor New York Commercially
NEW YORK, Aug. 27.-while the
general tendency OF stock prices has
been downward during the week. It
has been simply a continuation of
conditions that have existed for
some time. Price movements have
merely measured the vulnerability
of the market position of particular
stocks, and have had no especial
Significance in relation to the gen.
sral economic situation. On tho
other hand the bond market con-
tinues firm and this is significant.
Had there been any let down or set
back in the bond market there
might have been some justification,
for pessimistic Views that have been
so freely expressed by superficial
observers of current conditions. 1t
reveals the fact that investment
buying has been going on, which Is
applied first to bonds yielding the
larger returns and gradually reach
ing those furnishing smaller yields
but still representing sound secur-
ity. In the course of time this in
vestment demand extends to stocks
Of the seasoned variety that have
continued as dividend payers, later
to, those which are likely TO pAy
dividends in the near future and u"
Til the cycle is completed as the
public plunges into the highly spec
dlatiye issues. This cycle may eN-
tend over 4 few months. as it has
Hone in recent past or it may con-
tinue for years. The probability is
CHAT We are on the threshold of a
period that will continue for a long
time, unless disturbed by some such
radical development as the outbreak
Of another war.
Confidence is ReturnInE.
Confidence in financial, CONNER
Cial and Industrial affairs is slow
ly returning. 1t must be admitted
that 1t is very slow and at times
seems to lag altogether. But IL at
such times one is inclined to be
disturbed over the outlook. consola-
ton may be drawn from the fact
that there is no retrograde move
ment- Discourageme Mt, whenever it
is expressed can come only from
superficial survey of conditions 1t
is,whan one looks below the surface
that il is possible to find the basic
clements on which confidence is be-
ing reared.
There has been considerable un-
easinesS in financial circles for some
time because of the unsettled condi-
tions resulting from the tie-up Of
south American trade and it is an
Open secret that certain large finan-
cial interests have had to make
rather drastic readjustments in their
policiess. 1t can be said however.
? that these adjustments have pro-
ceeded far enough to remove ap-
and that in other re-
spects, the banking situation Is ma
terialIy improving. One important
DEVELOPMENT in this respect is the
passage of the bill by Congress add
ing another s500.00O. 900 to the ST.
Ooo, ,oOo, 900 already authorized as u
revolving fund for the War Finance
Corporation to be used for credits
in the expectation of farm products.
This will particularly aid cotton and
has already had the effect of start
ing the market upward, in what has
the appearance of the beginning of
a sustained movement If this
proves to be the case, il will bring
financial relief to the South, releas-
ing frozen credits in a large section
Oh Lnc COuuNEy IhoN mas OSNh "a
periencing a virtual moratorium, so
far as there was any dependence,
directly or Indirectly upon cotton
farming. So far as the reserve po-
sition Of the National Banks is con-
cerned, they were never stronger.
There are now ample credit facil-
tiles for all legitimate business and
il would not be surprising if there
were further reductions before long
in the rediscount rate.
Congress has adjourned for a re-
cess for thirty days. partly to al
low a breathing spell, but also to
make Il possible for the members
to return home and look after their
political affairs. The primary cleo
lions are at hand. and while a new
Congress is not to be elected this
year. most of the Senators and Rep
resentatiVes are political leaders in
their districts and their presence at
home is necessary.
Proves Able Leader.
President Harding has been as
suming his natural Fcsition of party
leader, which sooner or later be-
comes inseparable from the office
Of President of the United States.
He has SO far proved himself an
able leader in that he has succeeded
in obtaining results without an un-
due amount of friction. He has
succeeded in shelving the bonus
bill. possibly for all time, and has
managed to have the tariff side
tracked so as to make way for the
more important tax legislation. He
very quickly sensed the feeling of
the people that this was more i'm
portant than the tariff and sue
ceeded in impressing his view upon
the party leaders in Congress.
There has been some fear ex-