New Britain herald., 1921-08-13
WEEKS REVIEW AND IMMEDIATE OUTLOOK
Henry CleEs, New York Financial
 Expert, Gives His Opinions

New York, Aug. 13.-One of the most encouraging developments of the week was President Harding's stand on the tax question, in which he boldly advocated fair and posi- tive reduction of both taxes and ex- penses. Reform in these directions will not only be relief to business but also an important factor in the revival of confidence. Trade news has a better color and the prospects for autumn business in many lines have continued to be increasingly hopeful There has been an inn portant improvement in the credit situation during the past month. and this with what had preceded 1t makes a notable change for the better with in short period. The administra- tion's plans to help business, espec- tally the carriers and it's progress with disarmament plans, are long, range factors that promise much for the future Payment of principal and interest on the foreign debt. in- cluding German Preparation, is also an element of serious consideration. Foreign exchange has been much disturbed by the unsettlement con- neoted with these transactions, the effect being to hamper our foreign trade, especially exports, which show la continued heavy dininution. 1n- ports suffer likewise, and some means are necessary by which our purchases abroad can be facilitated, since our foreign debtors will be much better able to pay us in goods than in dollars.
 The Farm a Controlling Factor.
 With news from all parts of Europe, and especially from Russia, indicating an unusual crop shortage, the fact that our wheat output is es- timated at from 75O,000,000 to s00,- O0OO,O00 bushels is of controlling significance. The opening of large credits for the shipment of wheat to Europe shows that foodstuffs will maintain their primary place in our export trade and that there is every reason to expect good prices That the farmer so considers them is shown by renewal of demand. for l finished goods in the producing re- gions-a fact indicated by the re- serve systems index of retail trade when geogra phically analysed.
 Condition of the Railroads.
 One outstanding feature is the de- cided improvement in the position of the railroads. That net operating in- come of the Class 1 lines was well above $50,000,000 for June contrasts most hopefully with the deficit of about $16,00O, 900 for the same month
 2 year ago but by no means tells the
 whole story. Since July 1 earnings
 seem to have gone steadily ahead, and it must be remembered that sav- tings in labor costs, likely to amount Ito $1,0OO,000 a day, and in fuel cost, likely to amount to $4,000,000 or lmore per month, have now taken eff lfect. These and the various gains in efficiency that have been introduced 3holf1d give the July returns and those of succeeding months an even
 more favorable position, relatively speaking Reductions of export rates lately announced, as we'll as the
 much more far-reaching, though less obvious, cuts in transportation costs, due to reclassification and re-arrange-
 ment of charges are already greatly l increasing the amount of freight passing over some of the lines. The fact that in these circumstances cer- tain of the rails have suffered re- verses during the past week or two merely shows that the investment public has not yet full recognized the real change of outlook as regards the Transportation stocks in any practi- cal way.
 Market Outlook.
 Considering this weeks severe test the market has had to withstand it IS not acting badly The passing of the sugar dividend which has been
 paid regularly for so many years, the advance in money rates, and the prob ability, that congress will adjourn until next September without acting
 on the railroad reliei bill, are all
 contributory causes and sufficient in 1 themselves to diminish the buying power of the outside public which admittedly is already very small. The fact however, that daily sales are
 not running more than half mill
 lion shares is proof that no liquida- ton of consequence is taking place and without this the professional
 have difficulty in bringing about any material decline. The market has already discounted the passing of
 dividends and should now take q look to the future, which will mean re-
 storations in a number of instances To be sure this will require some little time but if trade and other au- lthoritative rports are to be relied lupon there would seem to be no doubt that business is on the mend
 Even in the steel and iron branch where orders have fallen off so tremendously, those in a position to
 know do not hestitate to say that the outlook is much brighter, and So far as the railroad relief measure is concerned it is disappointing of Icourse that there should be any de- lay. but after all, it only means 3
 postponement of thirty days, when
 congress will reconvene. There is
 no hope of course of any marked re- scovery that would stick at the pres
 ent time; on the other hand, it is
 not we'll to be % bearish with prices down to the present low levels.
 HENRY CLEWS