Evening star., 1922-05-13
BY STUART p. WEST.

NEW YORK. May 13.-The proceed
ings at the Genoa economic confer
ence have been the chief object Of in
terest this week in the foreign mar
|. kets and the international exchanges,
but our own security dealings have
been much more concerned with mat
ters at home.
The merger of the Bethlehem Steel
and Lackawanna Steel companies.
coming unexpectedly, appeA<.d
strongly to Wall street Imagination.
1t recalled the prediction which men
of affairs made at the outset or the
year that 1922 would be period or
moderate prices. increasing competi-
tion and consequently small proht
margins, and that as a logical result
of these conditions it would be year
Of industrial combinations designed
to effect economy and better meet
trade rivalries.
Steel Mergers Center OF Interest.
In some degree the situation is COM
parable to That of two decades ago
which Witnessed the birth OF the
United States Steel Corporation. That
was Il time when profits were small
and when a bitter competition was
threatening. much more so, however,
than at present. The steel trust was
a creature of necessity and as such
was formed in reckless disregard OF
the prices paid for individual prop
critics. The immediate result was q
wild speculation and a brief era or
eXuberance in Wall street. The ulti-
mate sequel was ruinous collapse
in steel stocks. the effects of which
it took ten years Of the most con-
servative management to undo.
Danger Of Big Plant Valuations.
1t is not to be presumed that the
present Bethlehem Steel-LackaWanna
Steel combination will involve the
grossly inflated valuations tina: the
Stee. Corporation did in 1901. Stil
both this and the other pending
merger of steel companies may well
be looked at with remembrance
of the lessons of the past.
Experience has taught that what
ever may be the ultimate benefits
and they are undoubtedly great-the
first tendency is for the merger con-
stituents to set an excessive value
upon their individual plants In the
end these merger values may wei. be
justified, as they were in the case OF
the Steel Corporation. but the invest
ing public has to consider what may
happen in the nearer future.
Speculative Interest Revived.
The suggestion. accompanied by
TlSiUS prices, tHdl thiS 10 Il
time when large industrial consolida- :
tions are likely has revived interest
in the speculative market. which a
week ago-and. indeed. for the first
part of the past week-waS decidedly
on the wane. Notwithstanding this.
however, the events of the last fort
night have carried their warning that
the April stock market went to eX-
tremes in discounting business i'm
provement and that a recurrence of
so violent speculation would surely
be followed by second severe check.
Another week has passed, making
over a month altogether, without
any inclination to renew the advance
in investment bonds. The inference
Is thus strengthened that the COM
petition afforded by the huge out
pour of new securities has checked
the upward movement in the invest
ment market, despite the persistence
of the lowest money rate in five
years.
Genoa Less Important.
The continental exchanges have been
more or less sensitive to the unsatis-
factory course of things at Genoa
Their decline, however, has at no time
been at all important, and taken with
the fact that sterling during the week
recorded a new high for the year, the
exchange situation shows no very seri-