Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1921-10-02
BY STUART p. WEST.

Especial Dispatch TO Morning JournaD
Copyright 1921 by Albuquerque JOurnaD
New York, Oct. IA brief sum-
mary of the business and financial
situation at the close of the pres
ent week would show that a decid-
ed turn came toward the end of
August. and has been slowly UNI
folding during the succeeding
months, that this change has been
duly recognized by a rise Of five,
ten and fifteen points in stocks
and an advance in bonds to the
highest level of the year, but that
the markets have shown them
selves satisfied to hold the ground
gained and to await developments
at the trade centers before at
tempting any important new
movement.
Wall street fluctuations, taking
the week as a whole, have been
small and net price variations
slight The advancing tendency in
bonds has been checked by heavy
outpour of new securities, Compel
ing with the old and helping to
take the sharp edge off the invest
ment demand. 1t still does not ap-
pear that bond prices have fully
adjusted themselves to the pros
pect of permanently lowered inter-
est rates. The return on many
good investment issues is high des-
pite the rise of the last few
months, in comparison with the
yield Of money loaned out in the
market. But it will take time for
the demand to digest the new cap
for a further upward movement.
July Saw Upward Turn.
Regarding business conditions
generally, it is pretty well agreed
that the downward movement
reached it's lowest level in July, as
it was the month when prices We're
at rock bottom. The turn which
has come since then is the last
turn, it is believed, in the sense
that the July prices will not be
seen again. But on the question or
the present recovery there is much
difference of opinion.
The collapse of year ago came
so suddenly that production could
not be cut down in keeping with
the paralysis which came over the
buying movement. A state of over
production was the inevitable re-
suit and it was an excess of goods
in merchants hands that was the
main cause of depression through
the first half of July.
Replenishment of Stocks.
What has happened since June
Is that one industry after another
has reached the stage where this
surplus has been worked off and
where consumers had TO look to
replenishing their supplies. 1t is
this replenishment demand now in
progress which is responsible for
most Of the price advances and
other signs of a quickeninS or
business life which have been not
ed during the last few weeks.
The point of doubt is what Will
happen when merchants have got
through restocking. Will the gen.
eral buying power have then eX-
banded sufficiently to drop pro-
duction and distribution at the
higher ratio or will it not? on
the answer to this question depends
the sequel to the current increase
in commercial activity. whether it
will be sustained and slowly con-
tinued, or whether it will be fol-
lowed by a partial relapse and a
period of stagnation.
Farmers Buying Power Curtailed.
Ordinarily the main source OF
the countrys buying power is de-
rived from the crops. The farm
ers sell their wheat and cotton and
livestock and spend the proceeds
at the manufacturing centers.
This year, however. they will be
getting low prices for their prod
ucts, especially for corn. which is
selling at the lowest in ten years,
and for cattle, which 1t is claimed
cannot be shipped to market at
present freight rates and yield any
profit at all.
Moreover, most of the money
which the farmers receive will be
used to pay off debts. That this
is putting the economic position in
much better shape goes without
saying. But it is not leaving room
for the normal buying demand to
develop.
Moderate Gains Probable.
This is a fact of the first i'm
portance to remember in calculat-
ing the business outlook. 1t Is not
consistent with any idea of great
activity in the near future. or in
deed until well along into next
year. On the other hand, 1t is not
inconsistent with the view that the
business situation will at least hold
its present status and show some