Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-06-18
BY STUART p. WEST
Special csrressondsat Of Great Falls Tribxns
Sopyrisht, 1922. by The Great Falls Tribune

S~opyrisht. 1922. by The Great Falls Tribune
New York, June 1.-THE severe
check to Wall street speculation in the
past week had been clearly foreshad-
owed in development as they were sum
married a week ago. Nothing hap
pened in the outside situation that had
a really serious bearing upon the mar
ket. The failure of all negotiations for
a German loan was disappointing. 1t
naturally revived discussion of Ger
man ability to fulfill the reparations
program and uneasiness on this ac-
count was reflected in the drop in Ger
man marks very close to the extreme
conspicuous weakness of French ex-
change.
But from the Wall street point of
view, these were only minor factors.
The market had discovered at the close
Of the previous week the public was
no longer responsive to efforts on the
part of speculative s%yndicates to draw
it in. Good news in the shape of fall
ing money rates and increasingly ia
vorable trade reports fell flat.
Prosperity Overdiscounted
The reason was that the speculative
movement had gone too far in April
and May. 1t had acted as if the oun
try were on the verge Of a great bust
ness boom. whereas the best that was
to be expected was continuation at a
gradual pace of the recovery in indus
trial lines and the return to a period
of moderate profits.
The succession of million share
days on the stock exchange. accom-
panied by the continuous and often vio-
lent %upbidding of prices. did not fall
far short of the markets Of 1916 and
1919. when general business was piling
up abnormal returns and the country
was in the midst Of wal initiation. Rec
ignition finally had to come that no
such condition confronts American in
dustry at the present time and that
Wall streets campaign d%iscounting re-
viving prosperity was in the first place
oversanguine and in the second place
altogether excessive.
Wall Street Position Stronger
The whole question before the stock
market at the close of the week is
whether the reimbursement has been
sufficiently thorough. In many in
stances stocks have come down two
thirds 10 three-quarters of their entire
gain since March and as the March
price level was a conservative level
when taking into account the improve
ment in outside business, it would seem
that where the reaction has run thus
far, it has FUN far enough.
In other instances where the setback
has been less extensive. the corrective
process may have TO be carried further.
But ut least tn. Wall street position
as a whole is very much stronger than
~ uac CT thu har " nf III. p-a<4-t
J
The investment market has been lit
tie affected by the weakness in the
speculative quarter. but still there are
no signs whatsoever that the main adj
which was checked in April. is
about to be resumed. Several of the
Liberty issues and other government
war bonds have sold up to their high
points and even higher. but these are
exceptions. The general run of high
grade corporate bonds continues below
the high average of months ago.
British Bank Rate Reduction
Reduction Of the English bank rate
to 31o per cent-the lowest since the
part of 1914-is mainly an effort
to encourage revival in British trade.
The very relaxed conditions in the
money rate, which make such
action possible, have resulted from
d~ullness in general business and the
consequent piling up in bank deposi-
tories of funds which normally should
employed in industry. But the low
pr bank rate is unquestiouabiy favor
able. 1t means that Great Britain has
brought about such an entire change in
is foreign trade relations that ii can
afford to let down the credit bars
fear of any serious exodus of