Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-10-08
BY STUART p. &
soseial corrssDondsnt Of Great Falls Irlbuas


New York, Oct. THE past week
has seen a general recovery in the
markets, undoing such loss as occur
red while the Turkish trouble appeared
TO be in an acute stage. This recoV-
cry has been simultaneous in govern
ment bonds, in the foreign exchanges,
stocks and cotton. The stock market
however has had other considerations
that interested it more than the sub
sidence of the political crisis abroad.
Increased output with rising prices
in the steel industry, carloadings
which showed the present volume OF
railway tonnage close to the largest
ever known, the disappearance of such
slight signs as there were a fortnight
ago of a hardening money market and
the Standard Oil recapitulations entail
ing enormous stock dividends-these
have been the matters to receive more
attention and to exert the greatest
influence upon the course of prices.
Motives Behind the Rise
The two essential motives back OF
the. renewed rise in stocks are the as
surance that the crop moving demands
are not going to seriously curtall the
supply of credit available for Wall
street purposes and the prospect of
reasonably profitable conditions in
most lines of business for at least an
other II months ahead.
There can be no real trade boom
without a revival in the foreign COM
merce and of this there is unfortunate
~ no sign as yet. The home market
IS big enough to allow a very substan-
tial degree Of expansion in industrial
production but without the aid of a
normal foreign demand the relation of
output to buying power is so close that
business must be conducted under the
active cooperation and consequently
moderate profit margins. of course,
there are exceptions in certain lines,
but this is the major rule.
Meeting Renewed Competition
The defense to this increased COM
petition is the formation of new com
binations for the cutting down over
head and introducing more economical
processes of manufacture and distri-
button.
Within the last two years we have
seen the copper companies get togeth-
err and pool their foreign business under
the head of the Copper Export asso-
citation. We have seen the chemical
and dye companies come together in
a large consolidation. More recently
there have been the efforts, only par
tally successful, to bring about the
merger of independent steel com
panies. The tobacco industry has had
its union of manufacturing and selling
companies and within the last few
days has come word of an export COM
bination among the principal sulphur
producers.
When the history of the period fol-
lowing the great industrial depression
of 1920-21 comes TO the light the
tendency toward big industrial con-
solutions win undoubtedly be set down
as one of it's main characteristics.
Wall street, however. has had a
rather expensive lesson in the case
of the steel stocks Of what it means
TO overrate the effect of these merg-
ers upon security value.
Government Loan Terms
No inkling has yet been given as to
the terms and nature of the loan which
the government will soon have to float
to take care of its maturing obliga-
tons. The investment market had
gotten over its fit of depression due to
the fear that the competition of these
new securities would weigh heavily up
on existing issues. Still beyond a
moderate recovery the bond. list has
done little.
The impending treasury action re-
mains a source of restraint even il it
is not occasioning the worry it did q
fortnight ago. The one certain thing
is that the treasury officials will first
Of all have in mind the safeguards of
the market for the present Liberty is
sues. They are not likely to fix terms
for the new securities which will make
the older bonds appear high where
they are now selling.
No Extra Strains or Resources
AS for the effect upon the general
market it has TO be remembered that
while the new securities will compete
easily with and possibly have a
slightly depressing effect upon the
older issues there will be no extra
strain on investment resources. The
capital that will be absorbed by the
new bonds or certificates, which ever
they may be, will be matched by the
capital released from the victory loan
and the other var paper to be re-
tired.
Germany's Vicious Circle
The fresh decline in the German
mark following a month of compare
tive stability, has given another proof
of the vicious circle in which German
finances are working. AS the market
goes down everything goes up. The
rise in prices involves the need of q
constantly expanding money supply
and credit supply. The only resource
to meet the currency scarcity n
credit crisis threatened is to keep
LONG AND SHORT TERM BE
W. VIyzIIz n 4 N