The Birmingham age-herald., 1921-03-14
Fly THEODORE H. PRICE
Editor, Commerce and Finance Copyright, Theodore H. Price Publish-
 ing Corp.

| ". Fly THEODORE H. PRICE
 Editor, Commerce and Finance
 Copyright, Theodore H. Price Publish-
 ing Corp.
 New York, March IS - Special )-Among
 the specific news of the week the wage
 cuts announced by the leading railroads
 overshadow all else. The dismal picture
 of the condition of the roads which their executives drew as Justification for the
 cut was seized upon by spectators who
 drove railway stocks down in what was
 almost a rout, on the theory that if the
 labor board declines to approve the cuts
 or if labor trouble results the financial
 condition of the roads will be truly pre-
 carious.
 In creating such an impression the rarf- , way executives appear to have over
 reached themselves. When they well
 ccmed the regulation of the transporta
 tion act last year they accepted higher rates and higher wage scales, based upon
 each other. As the event has turned out. both rates and wages were too high for the period of readjustment which fol-
 lowed, but the rates. not the wages,
 caused the decline in traffic. Therefore,
 it is not surprising that public sympathy
 is lacking for a proposal that wages
 should be reduced without any core.
 spending cut in rates based on them, or
 that Senator Cummins should father an
 investigation to determine whether pres
 ent rates are justified and whether gov
 ernment ownership will not be the event ual result.
 The worlds hopes of early reconstruc-
 tion in Europe have been further de-
 ferred. The solidty of the staple mar
 kets here and abroad has reflected the
 comparative unimportance of the puni- tive measures in themselves but the fur
 ther postponement of settlement has brought our domestic troubles into hlgn
 relief, and made us more keenly receptive
 to bad news. With the investing pubic
 in this frame of mind, it is not surprls- ing that on the stock exchange buying , support fell away last week from securi- ities affected by unfavorable develop ments notably the rails. and that many prices broke to the lowest since the slump at the end of December.
 ENGLAND ALARMED
 : In no other market however, is there evidence that the necessity of extending
 the territory occupied by the allies IS viewed as unfavorable Britain professes ] alarm over the expense involved, put the London securities markets are strong } CT, much more new financing is peing , done on the continent than in New York, and dispatches reflect confidence which contrasts strongly with Wall streets pes |, simism. Foreign exchange, which de- clined early in the week, more than re- } gained it's loss by Saturday. Cotton ana sugar are slightly higher. The rise Tn cotton while small, is particularly reas- 5 surfing because it is usually the first
 commodity to decline when international troubles are in the offing.
 The fact is that the advance to the Ruhr cities is destructive influence only ' to sentiment. It does not change the sit- uation except that the parade of force -A.~z ~f x-t~ fnerto from which the allies can collect part or | Germany's income at the source may in- fluence her to compromise earlier with the preferred terms. Provided that the occupation is not allowed to interfere with German production of the goods with which she must pay the indemnity
 it's effects are as likely to be favorapie
 as otherwise The situation is in reality i unchanged; disappointment prevails oniy because it is not definitely better.
 A similar feeling seems to prevail Tn the United States. Many business men
 profess their inability to see any early improvement. but they generally believe that the future holds nothing worse ana more are admitting that this is time for l courageous building rather than cautious
 conservation. The wise merchant uses
 his opportunities to buy in moments or
 depression, which come inevitably while
 our stocks of grain and cotton are larger | selling The department of agriculture : reports that the percentage of last years : wheat, corn. oats and barley cr0uH held , on the farms March l was nearly the : largest on record, and the publication of 2 these figures was utilized by the bears for :, a fresh assault upon prices, but their . !. success was short-lived. for the selling met an eager demand, and people are
 coming to realize that well stocked gran aries and large supplies of raw cotton
 do not mean national bankruptcy, pro- . vided the credit facilities necessary for deliberate marketing are available.
 U. s. IS SUPREME
 And whatever else may be said it is , evident from the large surplus which re- mains unsold that the crops of 1920 have
 been deliberately marketed. and that the : unsold production still on hand gives us grip on the worlds monetary supply.
 which assures an abundance if not a . plethora of credit which must ultimately ! . result in a revival of speculative activ- ity Though it was ssid early last year
 that we had already attracted all the gold
 which the rest of the world could spare us I have already pointed out that our
 imports of the metal exceeded our ex-
 ports by $212, 600 during the seven mcnths ended January S1. Since that date our stocks have been still further in- creased. Additional net imports up to February O tot3iieu *zo.UVVV. anu eh~ rate has been maintained since. S.Wu,W' having arrived last week and S,UoWO more being expected from Canada. As long as we insist upon the mainte- nance of the gold standard and continue to import gold at this rate there can De but one result. Our reserve ratio, all ready the highest in months, will con tii,ue to rise, the pressure to lend money will increase and the temptation to em- ploy it in new enterprise will prove IT, resistble Secretary of the Treasury Mellon. in one of his first public state- ments. emphasized the tendency toward relaxation in discount rates. a state- ment which assumes much significance when 1t is remembered that the tightness of credit results not from necessity. but from the policy of board of which the secretary is an influential member The great advance in prices which began in 1915 was due largely to the buoyant power of the enormous increase in our gold re- serves. and while their effect seems at present suspended because of the hand to-mouth policy which charactrizes buy