Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1921-08-15
MARKET ACTION
is CONTRARY TO
DEVELOPMENTS
Influences Operative in Sc
curity Circles Are of Ma
ture to Bring Confidence.
STOCKS ARE CHEAP

MONITORS WALL STREET REVIEW.
NEW YORK, Aug. achievements in
the stock market during the week once
more have run contrary to the character
Of the known developments.
News has been constructive and encour-
sging, but the action of the market in
the main has been disappointing. Even
the stock explanation that Something
is hanging over the market" furnishes no
tangible clew to the mystery. The episode
Of the mercantile bank Of the Americas
apparently has passed its most disturbing
phase and may be dismissed as menace
to the local financial situation.
The influences ordinarily operative in
the security markets have been of a ma
turt. to stimulate confidence. For ex-
ample, there could be nothing more cal
culated to instill optimism than the an
nouncement from Washington that the
Nations tax bills are to be cut by more
than half a billion, and that the excesS~
profits tax is to 60 Enormous econo-
mics should result from the discussions
at the coming disarmament conference,
and it seems strange the stock market
should wait for actualities in view of the
substantial shadows they are now cast
ing before them
MONEY SITUATION
Is IMPROVING.
Moreover the money situation is Inn
proving and promises still further better
ment. Little attention, perhaps, has been
paid to the greatly lessened demands for
crop movement purposes, compared, for
instance, with last year As an illustra-
ion, It might be pointed out that we have
the prospect for a wheat crop, both
spring and winter varieties of ISL COO 600
bushels compared with ISL ,00O0 COO bushels
last year. The August 1 price per bushel
to the farmers as estimated by the De-
partment Of Agriculture, is a trife under
S1C5 a bushel, compared with q little
more than 1922 a busheI last year. This
calls, theoretically, for nearly $500 600 600
less than was required last year. In the
case Of cotton the figures are even more
striking At this time last year a crop
Of more than 1900. 600 bales was about
to move 10 market. and the farm price on
Aug l was 36.S cents per pound. This
meant tentative demand for about ST.
400 100000 This year with a crop fore
casted at about 5000 900 bales and farm
price Of 9.S cents a pound, the theoretical
requirements are only about S4O0 000000
for full two billions less than last year.
In the opinion of sober minded judges
who do their own thinking free from the
contagion Of pessimism stocks ara
ridiculousIy cheap. Weak spots exist.
no doubt. but ia the opinion of these
observers the present level discounts any
probable development Of a disturbing
nature. Wall street holdings have been
reduced to a minimum, as recent figures
on brokers' loans indicate. If further
liquidation is impending, one wonders
from what source it is to come. In all
probability the predictions of further
pressure are based on habits of pessimisn
formed during more than a year and
half Of liquidation.
BANK LET'S
BUSINESS SHIFT.
l. is only fair to set forth the theory
upon which prevailing pessimism IL
based. There is general admission that
the banking situation has improved ma
terially. That is, 1t Is conceded the banks
themselves have in many instances
succeeded in extricating themselves from
numerous entanglements that have caused
widespread anxiety until recently. 1t
seems strange that this Improvement in
the banking structure should furnish
capital for bearish arguments, but It
does 1t is contended, for example, that
the banks. now that they have worked
themselves out of embarrassing positions,
will be inclined to stand aloof and per-
nit the luckless corporations and firms
to shift for themselves. In this ordeal
only the fittest will survive, say these
financial Cassandras. and the climax OF
receiverships will mark the end of the
agony.
This may be perfectly logical but the
element Of the human equation is being
overlooked. Economic tendencies proceed
along stern lines. but they do not en-
tirely overlook the principle of compro-
mise Many a concern whose mistake
might have entitled it to be consigned (, Il
the limbo of insolvency are likely to be-
helped through the valley of the shadow
with none but the directors cognizant Of
the perils encountered.
In the recovery which IS believed to be
not far distant, the railroads are expected
to reap the largest initial share Already
their economics are beginning to bear
fruit in substantially increased earnings,
and in the event of favorable action by
Congress on the relief suggested by the
President, the rails probably will be the
leaders in the embryonic stage of the
next bull market-Copyright 1921, by the
Public Led ger Company.