The Washington times., 1922-07-11
MARKET COMMENT.
Copyright. 1922, by Cosmopolitan News

NCopyright, 1922, by Cosmopolitan News
Service.)
NEW YORK. July i1.-That the
Now York stock exchange and kin
dred associations form q very neces-
sary part Of the Industrial and com.
mercial mechanism of business IL
the conclusion Of the American
Economic Association, as the result
OF an exhaustive study of this sub
ject. The association submitted q
number Of inquiries to the heads Of
business, taking care to direct these
questions to many who were known
TO have an aversion to speculation
as such. The majority Of the
questions had to do with the neces-
stty and importance of the New
York stock exchange. and brought
forth replies which indicated that
an overwhelming majority Of bust.
ness men recognize the necessity
for this institution. Aside from
the fact that the abolishment Of the
exchanges would lead to the crea-
ton of unsuitable substitutes, the
consensus Of opinion seems to be
that such a step would "injure
business In general and retard in
dustrial development" The only
indictment against the exchanges
were that they may encourage
speculation by ignorant persons"
with the emphasis Oh the 'lgno-
rant"
An important decision handed
down by the State supreme court
In the matter of "no.par stock"
taxes may lead to the refunding Of
considerable moneys to corporations
which have been compelled to pay
taxes on the assumption that mo.
par" was equivalent to 800 valua.
ton on each share outstanding. In
the specific case under review, Il
was shown that the actual pAiL-in
capital OF the company was $S12,2o0
equivalent to about 1855 per share,
whereas the State taxes were levied
on a supposed valuation Of over
" 900. 900. calculating the shares
at 500 each. The decision on this
point is quite clear. It states
there IL no authority for he as
sumption that non.par value stock
has value Of 800 q share for the
purpose OF assessing the State tax"
The decision will affect quite a
number Of corporations. the stock
OF which 10 listed on the stock ex.
change.
As the time approaches for the
rendering OF the opinion Of the
feoeral Attorney General in the
matter OF legality Of the steel COM
~
seems TO be manifested in the
stock OF the companies affected.
After period Of comparative in.
activity, MidvaIe. Lackawanna. Re.
public and Bethlehem Steel stocks
nave returned to prominence in the
movements Of the markets and the
Of the tape Is that no hitch will be
round In the contemplated merging
OF these companies.
One Of the bullish factors operat-
Ing In the stock market during the
past Few months has been the buy.
ing OF American securities by for
eign investors. Confined At first to
bankers acceptances and prime In.
vestment bonds. the movement then
expanded to include the higher grade
dividend-paying Industrial and rail-
road stocks. London furnished q
good market for these securities,
win France a good second and
Amsterdam. as usual. an important
source OF railroad stock buying.
When war broke out. in 1914, the
buying OF our stocks and bonds by
British and French investors was i'm
uediately curtailsd, and for five years
thereafter no important demand for
them was forthcoming from the
other side. Now that this buying
has been resumed, 1t ought to be an
important factor in the movement
Of prices on our board.
II history 10 to repeat itself, the
upward swing Of prices on the stock
exchange has by no means come to
an end. but is subjected only to a
temporary recession. At least, this
Is the indication Of most Of the re.
liable charts and barometers. in
cluding that Of the Harvard
Economic Service which says:
There were four major upswings
in prices from 1900 to 1918, accord.
ing to our ten-commodity index.
The first rise began in January,
1901, and lasted for twenty-one
months: the second commenced in
September. 1904, and continued for
thirty months: the third started In
September, 1908, and was terminated
fourteen months later, and the
fourth continued for fourteen
months, beginning in November, 1911,
Thus the minimum duration of
price advance was fourteen months.
When We consider that the present
rise Of prices has been under way
for only four months, when meas.
ured by the revised index Of the
Bureau of Labor Statistics, and for
ten months. according to the ten
commodity index. the evidence from
former business cycles points def
nitely to continuance of ,the
nraaAnf Mnxxra I'd t,nnAa ax,,,ont