The New York herald., 1922-08-07
FINANCIAL NEWS
AND COMMENT
Short Sellers, Testing Market,
Find Stocks Are Held in
Strong Hands.
PRICES GENERALLY FIRM
Low Money Rates Point Way
to Chance of Profits When
Strikes Disappear.
PRICES GENERALLY FIRM

was
falling back under the strike handicap
were counterbalanced by belief that
when the strikes ended the upswins Of
production and consumption would i'm
swelled to greater proportions than in
May aud June. The stock market de-
| clined to become discouraged 1t pre-
sented 50 firm a front that speculative
venturers. seelsing to bring about re-
actions. were repelied before they could
work any real damage.
| 1t was possible that the sturdy tone
of stocks did not have its entire support
in public confidence over the industrial
future per Sc. No examination Of cur
rent financial factors would be COM
piete without reference 10 tho money
situation. An increase OF s34 900, 600 In
Federal Reserve cash holdings durins
the week was emblematic Of the proc
| esses that have worked all along to put
securities In strong hands and keer
them there. The presence OF the highest
ratio Of cash to note and deposit liabili-
ties In nearly five years practically tn
sures low money rates for some time Ia
come and points the way. as similar
figures have all OF this year. to the
chance OF profits whom industry shall be
free from handicaps again.
Many Stocks at AigA Levels.
Public interest. however. lies more
with strike phenomena and their effect
| on business and the markets than with
the easy situation Of money and credit
In this connection BrGdstreet's weakly
discussion OF business struck forcefu
note when It said that trade was strus
Cling bravely with man mada obstacle,
to = general gain In prosperity" The
markets felt that the strikes, as dam
aging as they have been In some par.
ticulars. were merely choking tho stream
temporarily. Many stacks reached 1sv
maximum prices for this year. whers
weakness occurred Il was clearly trace
able to reasons connected individual,
with the stocks which receded.
There Is more than . possibility tha'
last weeks cheer viii later prove t.
have been a little too insistent. Ont
cannot blink such information al wal
presented in steel trade surveys. vested
IN tho decline of tho Steel Corporation
operations from the rs per cent, OF ca
pacity of early July to 10 per cent. MOI
can the decline Of independent stee
works activities. lately comparable t
those Of the largest unit. to % PER cant.
b passed over lightly: nor can the -
pressive effect OF . 10 per cent. decline
IN active blast furnaces at the end O
July be ignored. nor would common
sense find anything encouraging In re-
ported plans of eonsuners OF iron ane
/ steel to hold back their purchases Until
thew found whether there would be Goa
enough to work up materials delivered
| to them.
| strikes Reduce Pro0ts.
The current facts and immediate
prospects Of business were not goof
when tho week ended. Reduced mil
operations mean curtaiied profits and
iesssned profits carry m indisrutabi'
application to dividends. Tho question
may be raised iatsr whether or not th'
buyers OF stocks acted through eco
| Judgment or were impresse6 with tn
strength OF business In Juno report
ana by the hope that the strikes secI
would be over.
/ The refusal of railroad executives
to entertain PrssidAnt Hardin1s pro
posais for the return Of striking shoI
men to full seniority rights created
soms interesting reAexea IN the mar
kets. While the deciination had beer
expected. Wall street. hopsa that .
would be shaped % that sosns uasssur'
4 Of adjustment could BE- found IN IN
reply. But Il could not os said tha
the rail- leaders stand caused even Z
small amount OF easinsss. once the rsa
sons prompting II were seen. II any
I thing, tho roads decisaen 60 carry or
until tho strike was broken lent sup
| port TO the stock markets Arm sub.
structure. A factor which might have
brought q flood Of selling was con
verted into . reason why stooks wsr'
not sold.
Relieve Strikes WIN E.1 seen.
\ The explanation lay In ths plAin sue
| gestien that ths employers wsrs % sur
Of their position that they csuid avei'
comprcmiss Possibly figures % Ii,
upbuildins Of mechanical forces wer,
open TO disputs from labor quarters
They were challenged. in fact. an,
when the week ended Il looked a
though other rail workers besides shop
men might refuse to continue. but tn
markets were more inclined to beiiev
that both tho rail and coal strike
would become worn out and stop soon
This week orvmises 10 contain i'm
pcrtant developments In the relation
Of England and France. upon which. I
is needless to say. rast much of inter
national business prospects. II recen
discussions OF debt settlements wer
Intended 10 feei out American senti
ment toward the cancellation OF Brit
aims obligation to the United States. II