The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1921-04-26
MANY INDUSTRIES
ARE ON N END
VARIOUS LINES TURN CORNER
ONE BY ONE.

Nt" lOTh- Apll -b.-IhlS week
has seen a pretty good test of the
judgment that the general business
and financial situation has turned
the corner. The stock market, call
ed upon 10 decide dubious and
skeptical view and an optimistic
view. has decisively shown its pre-
ference for the latter If il We're
the custom for security movement
to awai the actual occurrence of out
side changes before acting, this
weeks rise might seem, in part at
least. premature But il is the func-
tion of a security market to antici-
pate. and the advance of the last
few days has been a process of dis
counting an Improvement which on
ly barely started in some lines and
has still to start in others.
A situation where bad news in the
shape of the reduction and passing
of dividends and of very poor state
ments ceases to affect prices is a
very strong one All past expeTienc
6 teach that this il sure sign OF
the bottom being reached ana of the
markets getting ready TOR an upward
swing. This characteristic has been
repeatedly noticed in the Wall street
trading of the past month, and par
ticularly has il been feature in the
operations this week.
Independent steel companies like
the Republic and the Lackawanna
have come out with their reports for
the first quarter. showing barely
more than bond interest earned.
There is practically no surplus avail
able for dividends on the stocks. Yet
these reports have found the market
for steel shares quite impervious
Goodrich Rubber passed the divi-.
dend completely where most people
had looked for reduction, and
Goodrich stock went up.
Railway shares have held their
ground against the worst possible
earnings statements and in face of
predictions of receiverships in case
permission is not soon given for a
lowering of wage scales. While thus
on the one hand favorable news has
ceased to count, the market on the
other hand is prompt to seize upon
and enthuse over the first sign of
an upturn in oil prices and play up
to the full the recovery in the motor
trade. A price movement, which in
these ways magnifies all that is fav-I
orable and minimiZes all that is un-
favorable, is unquestionably one
whose predominating drift is up
ward.
The March figures on the foreign
trade, with their showing of the ex-
port cut in two from same month
last year, revealed the main cause of
the recovery in the exchanges. But
besides cutting down their excess
purchases over sales by half, the
countries of the world have shipped
TO the United States so far this year
the enormous sum of 5000. 900, 600
in gold. These gold transfers be-
came necessary when the American
banks shut down upon any further
extension of credit abroad as one of
the most vital measures for promot-
ing deflation. How much farther
the gold movement will be carried
depends upon whether the unusual
curtailment of foreign purchases
shown by the March trade statement
is to be continuing feature. If the
balance of exports over imports pre-
wallis at the greatly reduced total of
last month. 1t should be pretty well
offset by invisible credits in the form
of ocean carrying charges and Amer
lean tourist expenditures, with gold
shipments being necessary to make
up deficiency. But the addition
even of $500, 900, 900 TO this eoun-
try's gold supply must ultimately
tell upon money rates as il has upon
bank reserves. Likewise. il is a
factor to consider in any investment
forecast because of the close rela-
ton between the course of interest
rates and the course of bond prices.