The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1921-05-09
Bic FORWARD
MOVE IN FALL
JUDGING By TIE PAST CoRDI-
TIoNs ARE NOT YET AT THE
TURNING POINT
August or September Should See Great
Revival In All Lines

Revival In All Lines
New York, May 1T was in No
vember. 1919, that the great downward
movement started on the stock eN'
change. It was not until the follow
ing spring that the first signs began
to appear of let-up in outside trade,
and il was not until the early autumn
of 1920 that the business decline be-
came at all general. II it be assumed
as is not unfair, that stocks will move
as far ahead OF industry on the up
grade as they did on the down grade,
the bottom Of the Wall \reet break
having been reached last December,
trade conditions would not pass the
turning point for another three
months and recovery would not be-
come general until the late summer
or early fall. We have seen already
this prognosis partially borne out IN
the recovery that partly set in in bust
ness in March and April. If the pro-
gram is carried out. this Improvement
will gradually reach into other direc-
tons but the main forward movement
in business will not start until August
or September
Credit Situation Improved.
The signal for the stock market de-
cline year and half ago was given
by the Federal Reserve Board when
it began 10 mark up the official dis
count rate. The present movement Of
recovery was we'll under way on the
stock exchange before the first re-
verse step was taken by the banking
authorities. Still the reduction Of the
discount rate in The New York district
this week has been very helpful TO
the rising tide OF confidence in Wall
street. There is no idea OF its being
accepted as an invitation for Specula-
tion TO 90 ahead at full steam. On
the contrary. it is realized fully that
any great speculative revival at the
present time would be the one thing
which would prevent let-down of the
credit bars. But high banking opinion
has expressed itself this week. as it
did week ago. in the lowering of the
English bank rate. TO the effect that
the credit strain throughout the world
has been easing for some time, and
that denation is far enough along to
warrant some relaxation in the restric.
tions which have held the business
and financial communities in such
rigid grip for nearly year past.
That this has impaired stimulus both
to the investment and speculative mar.
kets Is certainly not surprising
Liquidation Lapse.
During the seven days ended May t.
the twelve reserve banks reported an
addition to their commercial loans of
nearly $3l.00O.000. This was the first
important interruption in the liquidation
start of the year. Whether this, check
il TO be temporary or whether rurtail-
ment of loans Is to be resumed. is 4
question upon which much depends 50
far as the discount policy is concerned:
The assumption that Federal Reserve
banks in the interior will Immediately
follow the example of New York and
lower their rates to commercial Dor
rowers. may turn out to he premature.
But the main point is that the COM
and Curtailment. is that the importa-
ton OF over $l50,000.0O0 gold has risen
from its extreme low some - percent
and Is back now to where ii stood in
the summer of 1918. With such a re-
corery further and more general
lowering Of interest rates can only be
4 question of a short time.
The investment market has shown its
appreciation OF what this means for
tho prices of all securities the return
on which is fixed. especially when there
is the accompanying feature Of a heavy
fall in commodity prices. The latest
compilation shows that the commodity
price list came down morr in the month
OF April than al any previous tim"
The average decline WAS Ia percent.
which means that the purchasing power
Of the dollar was increased by cor
responding amount. As investment val
nleS are founded upon IN" money value
and fiurtuatr accordingly. il is not 70
be wondered that the bond market
should have started forward this week
with 4 buying movement o! lar>er pro-
portions than anything seen since tho
elimination of the bloom in January
Deflation End in sight.
Deflation. by which is SiGnifed the
return TO = normal condition Of things
has been pretty well completed in prices
in production. and in "rn'itS. In IN"
fourth and equally vital uuarter--na1nc-
~ labor-.it still has farther to go. But
the most important accomplishments
along this line stand in the record Of
the present week. TIL" first is the %
percent rut in the steel corporation 8
payrolls which is not apparently to en-
counter any opposition. The second IS
the disclusur" by the marine workers
that this is poor time to oppose wage
reductions with a strike. Despite all
that has been said by representatives,
Of the railway men against their haN-
ing TO go with the rest these incidents
seem bound TO count in the final dispo-
sitlon q: the railway wage problem. II
workers in steel. in textiles. in shoe
factories. in the garment trades and
in many other lines HAY" had to- come
down m their wages. Il is quite uloGi-
cal for the railway unions 10 claim ex-
emption. The stock market. wh'ch
never wants for things TO happen. but
always looks forward. has registered
It's judgment in no uncertain way. for
in the rise this week railway shares
have even moved aheah Of the usually
favored industrials and railway bonds
have been the leading group in the in
vestment market.
To get productive costs down to
reasonable basis has been the main end
of the business readjustTent Of the last
eight months. This end ~ now in sight
and while wages will still he far above
the pre-war level and while the price
OF fuel by past stand7rds seems OK
cessivelv high. the whole situation from
the producers androint IS IN scunder
shape than It has been II six years.
With manufacturing costs down so that
inca0t{yn