The Birmingham age-herald., 1921-08-15
By THEODORE H. PRICE, Editor, Commerce. and Finance, New York. Copyright. Theodore Fl. Price Pub- fishing Corporation, 16 Exchange
 Place, New York.

| fishing Corporation, 16 Exchange Place, New York.
 | New York, August 14.-(Special.)-
 There has been a strange recrudes-
 cence of pessmism throughout the country during the week, though there is nothing in the news to war
 rant it. It may be seasonal, as the , present period includes the "dog days" but l am more inclined to go back for an explanation to Woodrow Wilson's contention of seven or eight years ago that business Impressions are largely psychological.
 During my entire career have never known time when the minds of men were more receptive to un- founded rumors of bad news. Last week the postponement by J. F. Nor gan of his departure for Europe, though it was caused only by private business matters and by his desire to be In New York while his partner, Henry P. Davison, underwent a criti- cal surgical operation, was seized upon by the rumor mongers and used as a peg on which to hang vague reports of financial trouble in high quarters. These found lodgment in minds predisposed to accept them and 1 tAey had, l believe, more influence than any actual happenings of the week in spreeipitating the decline in the securities markets, in halting the advance of cotton and in keeping down the price of wheat despite the bullish government crop report and the expectation of higher prices which is so general among traders. Is No Barometer
 l Mental unsteadiness is quickly translated into financial unsteadi- ness in the speculative markets. For
 this reason l do not believe that the
 stock market Is the reliable busi-
 ness barometer it is generally | thought to be, for while it's reaction | from a long rise generally indicates l forthcoming business contraction, it's
 recovery from a long decline is de- | layed by the pessimism which its own depression engenders so that in- stead of heralding business recovery | it barely keeps pace with it. 1 in-
 dulge in this somewhat theoretical discussion because this, I believe. is
 the relation which exists between the
 stock market and business at pres-
 ent,
 |
 seven days were put intoa a balance,
 favorable on one side and unfavor-
 able on the other, they would be sep
 arated something like this:
 | Favorable
 | Continued evidence of improvement
 in many industries, including build l ing, iron and steel, silk, cotton and
 wooden goods, automobiles and tires | Increased freight car loadings. Slightly more active wholesale
 markets and a steadily good volume | of retail buying.
 Primer prices of a few commodi- ties, especially foodstuffs. which have been too low in relation to other commodities.
 The decision of Congress to cut | $555, ,000,00 of the nations tax bill UnfavorabIe
 The passing of the dividend of the American Sugar Refining company's common stock. and other evidences of decreased corporation earnings. The probable postponement until Congress reconvenes in the autumn of action on the Presidents plan for funding the railroads debts to the government while paying the gov. ernment's debt to them.
 | That what Bismarck called the i'm ponderable" factors have outweigheC l the more concrete and positive evi 1 dences of business improvement brought to light during the week is
 discouraging, but should not shak'
 the faith of those who believe in tho
 tion.
 Of the news that has been con
 strued as unfavorable the statement
 that the railway refunding bill prob
 ably will be postponed exerted the
 most influence on sentiment, Counted
 on to make $500. .000,00 available fol
 the roads, its introduction in the Sen | atea immediately brought forth sharr criticism from the leaders of th'
 agricultural bloc" Eugene Meyer | Jr., mana ging director of the wal
 finance corporation. which is charged
 with the administration Of the plan
 explained clearly that it is not a
 loan to the roads but an extension of government aid In marketing their | securities, and the beneficial results
 which may be expected to follow it.
 adoption seem so obvious that oppo-
 sition ought to be quickly stilled. If | the senators persist in holding out against it they are likely to work a,
 much harm to their own constituents as to any one else, for, as has been I previously pointed out, the railroads
 are the largest purchasers of com
 modities in this country, and wher I they resume buying industry in every l section will feel the stimulation Railroad Credits
 ! Credits extended to the railroad l will never become frozen" The, will be used not for carrying con.
 modities. but for making purchases
 and the $500, o00,000 in securities now
 in the treasury vaults can be COZ
 verted into powerful tonic to busi | ness simply by turning them into cash, as the bill proposes. and allow | ing the roads to use the proceeds l The activity which their buyinf | would engender would be fei 1 throughout industry because 1t woule
 make possible the payment of othel debts. the employment of more labor
 and the buying of more raw ma l terials. Five hundred millions. pu into circulation, represents the addi
 ton of several billions to the busi
 ness turnover of the country. Mir
 Meyer estimates that I a million idl, men will be re-employed if the plar Is adopted
 1 Despite the setback caused by thi, l postponement, the traffic report