Evening star. [volume] (Washington, D.C.) 1854-1972, 1921-01-09
and anticipating a general picking up
in industrial lines later on

and anticipating a general picking up
in Industrial lines later on.
Money rates have not yet come
down. The per cent quotation on
Wall street is afraid to lower it's bid
while commercial borrowers are will
ing to pay per cent for their money.
There is not the slightest doubt.
however. that the tendency is toward
easier conditions in the money mar
interest rates plus the reduction in
living costs which has already made
the dollar worth considerably more
than it was-that is. behind the re-
markable movement in liberty bonds.
in corporate bonds and in preferred
stocks. These investment issues are
governed primarily not by business
conditions. but by the value of
money. They decline when money is
going up and rise when money falls.
Bond Market Improves.
The buying movement in the bond
market of the last few weeks has
signif1ed very. much more than the
ordinary January reinvestment de-
mand. 1t has reflected the prevail
that interest rates are coming down,
and that in the course of another
year or SO high-grade securities
which have been selling on any
where from 5h to an $ per cent
basis will be selling to yield some
thing like 4 to per cent.
That the reduced prices have slim
ulated fresh buying in various in
dustrial lines is vel established.
This result has so far been by no
means general. but the resumption OF
many Industrial plants that were
closed down for quite period at the
year end is good enough proof that
business men consider that the read
justment has gone far enough ana
that consumers will soon recognise
the fact. The most pleasing feature
in the business situation at the mo-
ment is the attitude of labor. The
contrast between the eXtortionate
wage demands and the widespread
strike movement of two years ago
and the willingness now everywhere
shown to- accept wage reductions OF
20 to 80 Per cent is impressive ana
inspiring 1t means that the much
discussed liquidation of labor Is be-
ing accomplished without any OF the
friction which was feared by nearly
everybody who talked on the SUBJECT
six months ago. -
The extraordinary recovery In
sterling exchange which has In
fluenced all other foreign exchanges
in greater or less degree is one OF
the outstanding episodes or the week.
1t seems clearly to be based on. no
transitory ground.
~ is the most promising movement
" the direction of restoring some
..pproach to equilibrium in interna-
,ional credit that has yet been seen:
The favorable turn in the relation OF
British exports and imports has OF
course counted as factor. So has
thn prospective easing of money con-
ditions here. But besides the sterling
market has reflected confidence IN
the outcome of the various measures
that are being taken here and abroad
to improve the international trade
situation.
It will probably be another two
months before either the War Finance
Corporation or the $1O0.000.000 cor
poration formed under the Edge act
will begin to function. The project
of the British government to partial
ly guarantee against loss. banks and
insurance companies which discount
bills originating from trade with the
continent is still in an inchoate stage.
But there is combination in these
various undertakings far more for
midable than any SO far conceived
for undoing the damage which the
war did to the commercial ex-
changes.
fC0pyrfght, 1921 y