Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-02-18
GOSSIP OF
THE STREET

poWnFer, IL notlceaply lacking. lne
public, at the present time, is chiefly
concerning insselecting the new short:
term issues. which give such liberal
yield on the Investment, and dealings in
such securities seemed for a time to
have displaced speculative activities.
There are many. however, who think
that the pronounced Bcantiness Of supply
and the large short interest constitute
a condition that will be reflected In ad-
vancing prices for some time to come,
and they are disposed to add to holdings
OF stocks already accumulated and work
for higher levels. especially In tho lead
ing issues.
The motor stocks demand a good deal
OF attention In some quarters. chiefly |
because Of the strength shown in Stude- |
baker. Chandler Motors and the rubber
and tire issues. and 1t Is insisted by
some Of them that tho motor industry
has passed through It's period Of depres.
surplus Of production will soon be e1
haustcd and that there will again. be
larger demand In this industry than
the plants, even at full capacity, can
supply.
In speaking Of these matters, It isI
said that the Ford Co. has 250, 600 cars
on hand, but that II would require only
moderate demand TO cause this stock
to disappear. The statement of General
Motors is regarded with satisfaction,
partly because OF its indicating the eI-
tension of consumption Of the products
Of this company during 1920, and 1t IL
insisted that where automobiles are in
troduced that replacement Is to be
looked for as q matter Of course In that
business.
Declarations Of the regular dividends
on many stocks, including Republic Iron
and Steel, Cuban American Cane Su.
gar and New York Air Brake has q good
deal TO do with the display OF bullish
sentiment and a good deal Is said about
the action Of the call market.
| These Developments cause aome to
suggest that the market will have suf-
ficient factors to enable it to emerge
from the condition Of inactivity, which
has been 10 general since the middle OF
January. and they attach Importance
to the fact that for some days past
many issues have shown pronounced
strength and responded briskly to the
appearance OF even moderate demand.
The steel industriais are regarded
with favor BY one important group and
allusion Is made to the probable show .
ing that will be carried In the annual
report Of the United States Steel Cor
poration which will be published within
O short time.
Although the action Of Reading com
mon since the announcement Of the
plan to comply with the mandate OF
the Supreme Court has been extremely
disappointing that stock has many
friends who think that sufficient con
sderation has not been given to the
value Of the rights. which will 90 &c
the shareholders Of this company.
Banking Developments Of Last Year
The seventh annual report OF thc
Federal Reserve Board is particularly
interesting in It's description OF the
post-w war economic readjustment nnt
the control and regulation Of credit
under the boards deAation policy. TIT
board points out that q downward
movement Of commodity prices had de-
veloped in all countries during th'
spring and summer OF 1920, and tina
this reaction was due to faulty or fail
ing distribution, and this In turn wa!
!. mainly the result OF lessened ability ol
greater reluctance on the part of wag,
earners and those with fixed incomes (
buy as freely as in the past. togethei
with increased productive capacity, al
J though in some cases goods produced
were not Of the kind and quality which
!. were most salable.
"Overprodrction" in the sense O.
badly adjusted production-excess pro-
, duction In some lines as contrastet
J with others in which production hat
characteristics of the industrial situa
ton in the various countries, including
.. the United States. at the beginning o
the summer Of 1920. These condl'
tions," says the board. might grad
, ually have r!ghted themselves withou
very serious effects or without th,
necessity for drastic readjustTnent bu
for the fact that virtually all countries
were passing through the same change
and they were therefore unable to asss
one another by purchasing. At tn,
! same time. the credit mechanism Of th'
world had already strained almost tc
the limit.
Little order has been brought TO tn
confused market conditions in iron ant
steel by the Developments Of the pas
week. according to the Iron Trade Re
view. A general movement among In
dependent producers In various lines u
join with those who had taken th,
initiative in price reductions in th'
! previous week Is In progress though .
disposition 20 act cautiously until thC
trade outlook Is better defined sti
marks the policies Of a number Of more
important interests. At the same time
Il is freely recognized that a competitive
market on the lowest basis has beer
established and scarcely an indenend
ent mill, II Is indicated. would refuse &c
meet the situation 10 protect itself.
The Steel corporation plants continue
to quote prices S5 TO $40 per ton higher
than their competitors In a number O;
finished products and are shippins
actively against 'arge order book or
that basis. Subsidiaries of the lcalina
interest report that cancellations or SITS
pensions OF business on hand, due tC
the lower prices Of tho independent;
makers, have been negligible. Neyerthe-
! less, Il Is apparent independent millS,
as q whole. are receiving larger frac
ton OF the new business than recently
| was the case.
The bond market Ia showing stronger
| tone. Dealers report more interest IN
the market, and little difficulty In dis
posinE OF new Issues. Compared to IA
few weeks ago, the demand is much bet :
ter with Indications that Il IA steadily
broadening. The persistent buying .of
Liberty bonds with the material advance
scored apparently paved the way for
more confident buying of other invest
ment securities.
The liquidation in business lines eyi.
IDENTIFY also resulted In more funds being
available for Investment. Since the first
Of the year there has been broadening
| tendency, and many investment bankers
are more optimistic IN regard to future
DEVELOPMENTS than they have been for