Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1922-05-15
CONFUSION OF
OPINIONS HAS
MARKET EFFECT
Price Movements Character
lied by Considerable
Irregularity.
SUBSTANTIAL REACTIONS
Special to Indiana Daily Times
and Philadelphia Public Ledger
nv MONITOR.

By MONllOh.
NEW YORK. May 1.-THE weeks
price movements have been characterized
by considerable irregularity, which rsnsl-
ly is a reflection of confused opinions.
The market has had fairly substantial
reaction along broad lines. 1t seems
reasonably clear that the recession would
have gone further. had it not been fer
the stimulating effect produced by the
Bethlehem Lackawanna Steel merger
which caused a sensational upturn In
Lackawanna. stiffened the entire steel
section, and sent Shorts running to cover
in numerous groups and issues. At the
close of the week, while optimism per
sists, there was undoubtedly strong and
growing professional element that be-
heves the market is in for an extended
period of backing and filing with the
usual accompaniment of irregular de-
clines here and there.
The friends Of the market feel on the
other hand that the subsistence Of pres
sure on declines, fails to bear out the
idea Of an overextended outside long In
terest When the market position Is
weak, the selling appears in volume on
the breaks. At present, while offerings
make their appearance on strong spots.
showing a desire to take profits, about all
that happens is check to the advance.
DISCUSSION ON
BROKERAGE LOANS.
There has been a good deal of discus
sion about brokerage loans These have
been estimated around 81 $50 100000 COM
pared with $500 600 last August, and
the high record Of S1,750 90 in July.
1919. Aay Interpretation of these figures,
however, should take into consideration
the enormous issue of new securities,
large part of which still figure in loans.
Brokerage firms have been heavy sub
scribers to new f1otations for clients ac-
count, and Ii is pointed out that the in
vestment character OF such operations
should not be confused with the ordinary
speculative transactions. and the re-
quirements for financing them.
Most firms, while taking bullish posi-
tion on the market for a long pull be-
lieve 1t is now something of waiting af
fair. There would be a disposition to
buy ligerally in the event of a good break
with its accompaniment OF liquidation. or
if certain industrial problems should be
solved in a constructive way. settle
ment' of the textile dispute in New Eng
land or the coal strike, sound decisions
in the matter Of railway rates and wages
developments of this character would
impart renewed confidence and give the
market new rropulsive force Otherwise
cause a postponemeut of bullish activity
until along toward autumn.
DISAPPOINTMENT OF
GENOA TAKEN.
The market has taken the disappoint-
ment-if Il can be called such-over re-
suits at Genoa rather calmly. Evidently
there was no real basis for expecting Il
broad and concrete program of recon
struction, under present circumstances
TO-
nomic progress. The Russian reply nat
uralIy is regarded as preposterious. The
British premier's irony In stating that
the preamble resembled bolshevik money.
comes close to expressing sentiment here.
Nevertheless, the possibility for ten
year truce and the fact that Germany and
Poland have come to a long term agree
ment on Silesia must be considered as
substantial gains as a result Of the
meeting.
Regarding the domestic situation, there
is feeling that the present year will
witness many mergers and consultations.
We have already had an example Of the
energizing effect of such developments In
the case of the steel merger. Several new
alignments and combinations are ex-
pected not only In the Industrial but in
the railroad field, and they may keep the
market on the qui yive for a considerable
time.
MONEY SITUATION
STILL FAVORABLE.
The money situation still exercises
favorable influence on the market The
Federal Reserve ratio improved for the
week to the basis Of 17.3, with the gain
rejecting relief from demands which
centered around the first Of the month.
Call money again eased to 315 per cent
hA &c -hof atay, cg1-a
over the railroad outlook and believes 1t
has reason for its anxiety. The action of
the Labor Board in placing ban on the
practice of the railroad Of farming out
repair contracts. is regarded as unsound.
Moreover il Is believed that II would be
unwise and equally unsound to attempt
q reduction in railroad rates without COM
pensation Offset In the form Of a down
ward revision of wages at the same time
There is plenty Of logic in the report Of
the Joint Commission Of Agricultural in
quiry In that portion Of It's findings re-
lating to railway labor and wages, but it
remains to be seen whether the precepts
laid down will crystalline into action.
That the gravity Of the situation is
realized is shown by the following extract
from the report:
COST MUST
GOVERN PRICE.
THE price of transportation is neces-
ga governed by the cost of transpor-
tation. There is, therefore, a very definite
relation between the price which the pub
lie pays for transportation. and the cost
which the railroad pays for labor. ma
terial and equipment. Certain elements
which enter into this cost are now sub
ject to regulation by the Interstate Com
merce commission or by other public
bodies. Wages paid by railroads are SUBJ
sect to initiation, determination and con-
troll by the labor board. Wages corsti
tuted 684 per cent OF railway operating
expenses in 1915 and 83.4 per cent in
1890 and are. therefore, the largest factor
in the cost OF transportation. We thus
have, therefore. the anomalous condition
of one governmental body controlling the
price of transportation and another gov
ernmentai body controlling the major
element Of cost Of transportation"
Here we have evidence that Congress
recognizes an anomalous condition." but
thus far nothing has been done to remedy
1t.
Far-sighted opicn is strongly favorable
to the coppers. The surplus Of the metal
at the first Of the year was about 793.-
100000 pounds. By the first Of June the
be only a trifle over $50. 900 900 pounds,
and as much of this will be earmarked
for domestic consumption and export, the
actual supply available for new buyers
will still be further reduced. One esti-
mate places this as low as 5000, 900
pounds. There are confident predictions
of Is cents and even higher for copper
by the middle of the summer and price
gains of this character II is believed