Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-10-29
BY STUART r. WEST
Special Correspondent Of The Great Falls Irlbuh'

SpuSfat correspondent VI gHe uIkat ~
New York, Oct. 2s.-The main ques-
ton before the security market for the
past week has been whether the de-
cline in prices was merely a natural re-
adjustment following an over rapid ad-
vance OR whether it betokened a real
change in temper regarding the general
business outlook. So far as stocks are
concerned there has been little evi-
dence of investment liquidation. Ihls
has come almost, altogether from tne
speculative element which. In order TO
justify its attitude, has protested ais-
appointment over what it terms the
slow pace Of industrial recovery. AS a
matter of fact, however, affairs IN inc
business world are moving pfeciseiy
according to intelligent calculations as
they were formed at the outset OF the
year.
Conservatives Expect No Boom
Nobody but the extremists have ever
fancied that there was gong TO Oe
a mad trade boom this autumn or WIN
ter. or even next year. All fhaI was
looked for was a return to conaltlons
Of the average pre-war perlod-a tal.
volume of production yielding moaera.e'
but on the whole, satisfactory proIlLs.
The stock exchange during ITS TWO
| campaigns, the first in the spring, tne
second in mid summer, had momsn.s
when it lost sight of these conserpallse
ideas. 1t went ahead WIFI q specua
lation which at times was aih9st a.
| wild as in the, days OF inflated war
profits and abnormal prices. Ihese
excuses called for a CORRECTION anu
it is the corrective process which was
| witnessed in September and again our-
ing the last week.
Investment Supply Overtakes peman
In the bond market the position IS
different. Here a real change occur
red in outside surroundings and tne
change was two fold. On the oil mana.
what between the enormous output OF
new securities during the last lo
months and the diversion OF capltai
into commercial channels, supply mas
oyertakep demand. On the other mana
because more money is needed to con-
duct the country business mar was
the case six or even three months ago,
interest rates have ceased going down
and have worked somewhat higher,
Consequently investment values, de-
pendent as they are principally upon
money rates, have stopped moving up
| and are off very considerably from the
peak of six weeks ago. The selling
of United States government bonds IS
especially illustrative of these altered
| conditions. Undoubtedly much OF the
selling of the liberty bonds has been
due to the desire of banks and mer-
camille corporations to have more cash
on hand.
Capital dissatisfied With Low Rates
The new loan at a discount of n
per cent has come down sympathetic
| allv. But apart from the more direct
explanation, the significant thing IS
| that investment capital has ceased to
be satisfied with a 4 per cent return
of the highest grade security a good
many people make the mistake of In
| f%erring from the oven subscription to
the new government issue that the
treasury could have succeeded IN DOR
rowing at a 4 per cent rate
The fallacy of this assumption IS
now apparent. At the same time 1t
is made clear that the total of the
subscriptions was not a fair measure
of the investment avallaole
for such financing. No small part OF
the total represented merely specuia-
! tive bids by bond houses and other
| dealers who figured that the new loan
would command a premium and that
they could turn a profit. Had the put
lie been as eager for the bonds as it
seemed to be on the surface the de-
maud would have been sufficient to
have kept the price at par.
European EconomIzing Has Limit
In advance of the October foreign
trade figures, which will not be out
for three weeks. it will be impossible
to discuss the effect of the new tariff
schedules. IL imports slump off 1t
| would be good economic theory to con-
clude that because we are buying less
from other nations they will not be
able to buy as much from us. The
practical side of the matter. however.
is that foreign countries have a GER
tain minimum requirement in food, raw
material and in certain manufactured
product which they must supply from
the American market.
This minimum, if it has not been
actually reached during the last l.
months. has undoubtedly been pretty
closely appropriated.
Necessity for Foreign Trade
OVerdraWn
Meanwhile conditions at home have