Evening star., 1921-03-19

/
ment here also.
Renewed Confidence Seen.
Renewed confidence that the busi-
. ness situation at large is on the
mer has been the keynote of the
upward movement in stocks during
the week. The second factor back
of the rise has been the partial re-
taxation of money rates and the gem
eral feeling that the money supply
from now on is going to be more
abundant. There has been occasion
10 realize the Importance of the dis
tinction between the wall street po-
sition as it was in the first week in
March and as it stood in the first
week of December. namely. that credit
conditions were immeasurably better
ond.
Now the credit crisis has not only
been passed. but the bank ratio has
so improved that an early reduction
in federal reserve discount rates can
, "" looked for. This is pretty sure
to come anyway in the not distant
future, but action would be fastened
it, after the British tax payments
are completed. as they will be by
| the end of this month. the Bank of
England were to lower it's minimum
discount.
Sterling Exchange Recovery.
The various movements in the for
eign exchanges during the week have
been more than usually interesting.
not only got back to where it was
before the. break-off of the repara-
tions conference, but it has gone
higher still. Here there is plain re-
! ftection of the steady improvement
from the British standpoint in the
relation of exports to imports.
There has been rather extraordi-
| nary advance in the Italian exchange.
due unquestionably to a genuine bet
terment in the fiscal and economic
position in Italy. On the other hand.
French exchange has not gained with
the rest, but has been inclined to go
the other way.
One explanation for this is that
certain large credits held in England
and the United States against France
have matured and have not been re-
newed. Another explanation is the
prevailing uncertainty over the next
developments regarding German rep
arations, which. of course, mean ev-
erything for the financial future of
the French. Just which of these two
influences is the more important is
something upon which more light is
needed before judgment can be pro-
nounced.
Foreign Trade shrfnknge.
AS expected. the foreign trade fig
ures for February revealed more
plainly than those of previous months
the effects of the decline in commod- :
ity prices. The heavy shrinkage in
both exports and imports as compared
with both January of this year and
February of last year was much more
a matter of price reduction than it
was of decreased volume.
The official computation that during
February wholesale prices were off
5lz per cent on the average gives an
adequate reason for the entire result.
The railway problem scarcely wears
any different aspect from what it did
a week ago. Apparently railway en-
ployes as a rule propose to fight the
lower wage scale, putting it up to
ties to the controversy are anxious
to expedite these proceedings, and it
is not unlikely that a test case in
volving some one representative road
will be brought up for decision, with
an understanding that it will cover all
other disputes.
Naturally the position in railway
stocks will remain somewhat doubt
! full until the wage question is dis
posed of. But the feeling is that pes
| simism on the railway outlook has
| been rather overdone.
i A settlement will probably be
reached on the basis of compromise
which will allow the companies to
| substantially cut down their present
excessive costs, while at the same
| time giving the men enough of an ad-
vance over normal wages to meet
their contention that the cost of liv-
ing has not yet come down sufficient
Iy to allow them to go back to where
they were.
Copyright. 1921. by Stuart P. West)