The Washington herald., 1921-06-26
By WALLER b. BROWN
Editor New York Commercial.


Editor New York Commercial. %
New York, June 25.-Hysteria In
the stock market seehs to be SUBJ
siding to some extent, but there
is still lacking anything in the
shape of substantial support. Such
small upturns as there have been
provided profits for those who have
had the courage to follow the long
side of the market, of which they
were quick to take advantage. with
the result that such upturns have
not lasted long. or at least have
been decidedly irregular. In Its
present shape. the market presents
opportunities to investors for large
returns, such as II has not offered
In q generation.
standard Industrials.
Standard industrial stocks are
selling far below their intrinsic
values, while bonds. some of them
of long-term maturitfes, can be had
at prices yielding 10 per cent or
more Some cumulative preferred
stocks can be bought at ridiculously
low prices, and in cases where these
dividends have been passed 1t SIM
ply becomes a matter of enforced
investment. To those who have the
courage to do so. the purchase OF
these securities to be put away In
their strong boxes will make con-
siderable fortunes.
The present low level OF the stock
market is not justified by business
conditions. 1t has been forced by
the tactics of the bear party, who
have realized that there was little
support to the market and have fol-
lowed up their advantage by all the
tricks known to bear raiders, some
of which presumably were outlawed
long ago. The chapter now being
written in stock exchange history
is not a creditable one, but as soon
as It is completed it will be fol-
lowed by a chapter telling OF sharp
recovery and a return to activity.
The story of the raid on Mexican
Petroleum is gradually coming out
as to its inner details 1t tells OF
the circulation Of half truths, OF
made-over reports Of examination
of the Mexican oil fields. distorted
to suit the purposes of the raiders
The shrinkage of values of stocks
generally has been enormous. 1t
has been as IL a ruthless enemy had
laid waste a prosperous country to
gain a slight objective.
Signs of Confidence.
Disregarding the eccentricities Of
the stock market, there are many
signs of returning confidence. A
large part of the present depression
is psychological; in other words,
a state of mind. Reports from all
over the country are now telling
of a more hopeful outlook. Their
cumulative effect is bound to react
upon the public mind and to start
bushes going again. 1t is not that
there is a lack of money. but rather
a lack of desire to purchase. Buy
ing has been deferred for the past
several months in order to see what
was going to happen. On falling
market the tendency is to buy only
from hand to mouth, but the index
| figures now show that the fall in
prices has pretty nearly run It's
course. The reductions OF the past
few weeks have been smaller than
at any time since the peak of high
prices a year ago.
Banking Position Sound.
Never was the banking position
of the country on a sounder basis
Many think precautions have been
carried to an extreme. These crit
les, however. are among those who
have felt the pinch of the dehation
movement and who think that the
methods pursued have been too
drastic. The probability is. how
ever, that these same critics. had
they been brudened with the re-
sponsibility of maintaining the
country on a sound financial basis,
would have been just as conserva-
tive in their administration of the
Federal reserve law as the Federal
Reserve Poard has been.
Little by little the frozen credits
are yielding. and with basic re-
serves growing at the same time
il is inevitable that easier money
conditions will prevail. This is
bound in time to result in a help
full natural relaxation in rates.
Alter all, the slowing down OF
business has little more than elimi-
mated the hectic prosperity of last
year. Some sort of idea of this may
be gained from the latest report OF
railway freight movement, which
is for the week ending June IL.
The total number of cars loaded was
7SS,997. which represented a gain
over the previous week of 82,4S9
While this total was 141,979 cars