The New York herald., 1922-09-04
FINANCIAL NEWS
AND COMMENT
Economic Situations Show
Change for Better in the
Week just Ended.
ALL MARKETS DO WELL
Movement of Stock Prices Is
Still Gaining After Year
of Swing Upward.

Viewing the economic events of last
week Wall Street saw several important
changes in situations which at times in
the recent past have affected markets
for securities These events included
the virtual settlement of the soft coal
strike, the breaking of the railroad shop
mems strike and the compromise ef-
fected between the Allies and Germany
in regard to the reparations payments.
cial horizon, making market operations
rather hazardous. In the case OF the
anthracite strike Wall Street was pretty
we'll satisfied that settlement was
near. for on Friday and Saturday the
strike news had ceased to be dis
tressing factor.
An Improvement was noted in all
markets last week However. particular
stress must be laid on the good showing
of the stock market which at the end
of August had completed precisely one
year in which the trend had been
toward higher prices. 1t was not until
the middle of last week that Wall
Street was able to penetrate through
the curtain of uncertainty and form
any conclusions as to the outcome OF
either the labor struggle or the politi-
cal situation in Europe, yet in the face
of all handicaps stock and bond prices
continued to rise.
Imitation Believed at Hand.
Thus it was plainly evident to those
acquainted with the relationship be-
tween security prices and economic con-
ditions that the stock market was obey
ing the dictates Of a natural law which
overshadowed day to day developments.
AS is usual with major movements such
as the one now occurring in the stock
market. progress has gone far before
its full import has come TO be realized.
Until last week the theory that sec
ondary initiation movemen. was at hand
had not been generally accepted. For
many months commodity prices have
been gradually readjusting themselves
upward and production in the basic in
dustries has been on the increase. The
rising volume of trade has been re-
Elected in bank clearings. which are
running Is per cent. over 1921, increased
car loadings, which have enabled the
railroads to show gratifying results de-
spite labor troubles, and the large in
crease in sales in the wholesale and
retail trades Commercial failures have
shown a tendency to diminish for some
time. while there has been an increase
in the amount Of borrowing for financ-
ing business expansion.
Yet the significance of all these hap
penings was not fully realized until the
increase of 20 per cent. in wages by
the Steel Corporation. which went into
effect last Friday, indicated that the
deflation process had stopped and that
the swing Of the pendulum was the
other way.
What has confused many students OF
conditions Is the continued ease in the
credit situation. with a steady decline
in money rates and an unusually large
supply of money for investment pur-
poses. These conditions, natural in a
time OF Industrial reaction, are foreign
in periods of business expansion. The
volume of bills discounted at the Fed
eral Reserve banks has been decreasing
week by week, until now it stands al
most at the lowest point Of the year.
Country Filled with Money.
Largely due to the falling off in for
eign trade, there is more money In this
country waiting to be put to work than
ever before now. Both imports and ex-
ports have been declining steadily for
some time. Since last spring money
has been piling up In the banks and
flowing into investment channels. The
decrease in new investment issues re-
Gently forced this money into securities
already outstanding. Hence the specta-
Gle OF rising markets which are forced
up by the pressure OF surplus money
even at times like last week when they
might easily have been unfavorabIy af-
fected by the current bad news One
OF the most interesting developments
last week was the demand for sound
securities yielding a fair return.
According to some official authorities
this country is in position to find
real prosperity without the aid OF for
cfgn trade and the large supply OF
money on hand can be used to great
advantage in moving the crops, correct
ing the housing shortage and rehabili-
tating the railroads. Present plans OF
the railroads call for the placing OF
extraordinarily large orders for rails
and equipment. An unusually large
number OF locomotive orders was
placed last week The rush for build
ing permits is by 90 means over and
there are few idle men in the building
trades. AS a matter OF fact II is said
that II there were no strikes and IL
industry over the country were we'll
balanced there would be practically no
unemployment and the country would
be well out OF the postwar depression.
The question confronting Wall Street.
and, indeed. business men all over the
country is TO what extent the present
period OF initiation will be carried That
the advance IN wages by the Steel
Corporation was an attempt TO meet
a situation OF real labor shortage and
that other industries in self-defense
were compelled to take similar steps
Is undoubtedly true and II raises the
question Of how far thrs condition can
be carried before 1t corrects itself. The
situation Is complicated by the fact
that the tendency to increase wages
has not been uniform among all types
Of workers and that some members Of
,he community might find themselves
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