The Washington times., 1922-06-18

merger issue, that has apparently
been left to work itself out in the
hands of the various interests which
have been promoting the combina-
ton Of steel plants.
Other Hopeful Factors.
Genuine progress is being made by
the railroads. as is to be seen from
the continued showing Of growth in
traffic and the probability that divi-
dends will be resumed or enlarged by
number OF lines which had sus-
pended or had reduced them. The
roads are evidently to be protected
in their legitimate interests by the
National Government. Less and less
Importance is attached to the threats
Of a railroad strike, and the discus.
sion OF that subject Is accordingly
regarded as more academic than
practical. The prospects Of combi-
nation Of roads under the plans that
have been worked out by the Inter
state Commerce Commission are Of
considerably more interest. Pros
poets Of continued abundance Of
money are good. and now for tho first
time does II seem likely that there
may be an early reduction Of rates
at Federal reserve banks, following
the cut at the Bank Of England to
az per cent. II il known that the
pressure for a cut in their charges
on rediscounted paper is increasing
in strength as their portfolios de-
cline.
Market Review and Outlook.
The long expected reaction in the
market practically made its initial
appearance this week. For many
months buying by the general public
has been conducted on an extended
scale, with prices constantly advanc-
ing and without the customary reces.
sions from time to time which 60 to
keep the market in a healthy condi-
ton. Under such circumstances q
8, back sooner or later was inevi-
table. Now that this has taken
place 1t goes without saying that the
situation has been much improved;
nevertheless, confidence has been
chilled to such an extent some time
will necessarily be required before
bull enthusiasm can be fully restored,
notwithstanding that conditions, out
side Of the market itself. are Just as
promising as they have been all
along.
The market at the present time
Is only acting according to prece
dent, l. e., break following a break
after an intermediate rally. The
reason for this Is, in the first place,
that a number Of accounts have
been weakened by the decline and.
In the second. that confidence in
values has been shaken to such an
extent that would-be buyers with.
draw entirely into their shells until
values again become stabilized.
Under such circumstances II IL al
ways difficult to prophesy with any
degree Of certainty how long q
downward movement win continue.
much naturally depending upon the
liquidation which ensues. There Is
nothing wrong with trade condt
tions, which continue to be very
abundant supply OF money, which
advances against good collaterals II
they ~ wish, and there is this to be
said of the market at the present
time. that the great majority of
stocks after the shrinkage which
has taken place are again reason.
ably cheap based on known merit.
and -eccgnition of this win even.
tually assemble o new lot Of buy.
ers. 80 far as the Investment situ-
alton Is concerned, announcement
by the Treasury Department that its
offering OF $3.50, 900 900 3X per cent
certificates were oversubscribed to
the extent OF 80 per cent tells its
own tale. II IL also noticeable that
In the marking down Of stock quo
tatsons those for the GENERAL run
which further roes TO show that
| the readiustment Of prices in the
share HIT 10 due almost entirely 10
the overbought condition into which
II had fallen and II not due to
underiyfng conditions