Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1921-12-18
FINANCIAL DIGEST
THE WEEK i'm BUSINESS
BY STUART P. WEST
BY The Tribune.
Special correspesdsat Of Great Falls Tribune
Copyright. 1891. The Great Falls Tribune

BY STUART p. WEST
Copyright 1891. Tho Great Falls Tribune
New York, Dec. 1.-THE most sig
nificant happenings Of the last week
have been the continued recovery in
the foreign exchanges, the compare
tive steadiness Of cotton prices IN face
of the discovery that the extent OF
last summers crop damage was gross
ly overestimated, the remarkable over
subscription at unusually high prices to
the $55,OOO.OOO New York city loan
and the advancing tendency in the
stock market, despite the skepticlsm
expressed for a month past IN numer-
GUS speculative quarters.
Whatever the causes associated
with these interests, they are all symp-
tomato of a world wide change for
the better in economic and financial
conditions. It lie not to be doubted, OF
course, that the tremendously import
ant accomplishments at the Washing,
ton conference have had good deal
to do with the rise in the exchanges.
Trade Situation Better
But with all due allowance for the
part which political considerations nave
played, the main reason why sterling
rates, from their extreme low OF last
summer, have got back half way to
normal. WIN French francs have lately
risen over cent, why other curren-
cies of continental Europe have. SINH
larly gained-is because the trade SIT
uation abroad is on the mend. Inc
reality of this change with it's bearing
upon credit standing of the nations
Of western Europe is further attested
by the way exchange rates held their
higher ground toward the close of the
week. This was in face OF Germany's
formal notice that she could not meet
the next installment of PREPARATIONS
except in minor part.
Confidence tost
1t is question whether the cotton
trade, after its experience OF the last
autumn, will ever again set too much
store by government crop report.
The trade was asked in October to
make it's plans for harvest of 6,oOO,-
600 bales.
Two months later it was told to re-
wise it's calculations and accept an estl-
mate of 100000 bales.
That cotton prices have stood up
as we'll as they have in the face of
this unprecedented reversal of a crop
position, points to the truth of two
conclusions. The first is that the
SOuLueTu cOILOu growers, AaSAh6 6oC LIZ
Of the bulk Of their holdings around
the high prices of September and Oc-
tober and having paid off their indebt-
edness at the banks. are able to keep
back from the market the remaining
supply if they choose to do 50.
New York City's Credit
The success of the New York stock
offering is a striking episode in that
the price received by the city was
much the highest in over 10 years.
This will be accepted as q sufficient
answer to the attempts by investigat-
ing committees and other sources of
criticism of one sort or another to
throw doubt on the high credit OF the
city of New York. But, as further
test Of the investment situation gen.
than the many other flotations Of new
securities made during the last few
months.
change, none Of the s55 100000 was
publicly offered. The reason plainly
enough was that no difficulty was
found by the successful bidder in plac-
ing the stock among people OF wealth
looking for a ta1-exempt security.
Stress Tax Exemption
The fact that this was exempt from
the federal tax and afforded a return
well above the average for this class
of investments. quite destroys the sig
nificance Of the fourfold oversubscrip-
ton and the high price realized as
compared with the issues of 1915 and
1917. On these occasions, Of course,
there was no incentive to hide the
funds of rich investors where they viii!
not be subject to a heavy tax burden.
C%ocL nynrfurn pranndanf
The main explanation for the stock
markets disergarding the precedent Of
an early December decline is simply
that the present situation is totally diff
ferent from that of the conventional
markets Of past times. Almost al
ways where stocks used to break in
the closing month of the year it was a
sequel to an overdone speculation in
the previous summer which came to
grief through a shutdown in the money
market.
These were the times before the
federal reserve, when every bank work
inc on its own hook. loaned up to the
limit in midsummer, and afterwards
put the screws on numerically upon
their Wall street borrowers.
Public Not In the Market
Such experiences of the past are in
teresting but Of no practical bearing
whatever upon the stock market of
nowadays So, too, it is not sign Of
weakness that the day to-day initiative
should be provided by speculative pools
and professional operators. So long
as they do not attract much outside
following the position will continue
strong. The danger stage will come
only when the public RETURNS to the
speculative field 1t is then that the
distribution of large holdings will begin.
SEASONAL DEMANDS FELT