Evening star., 1922-12-31
.H0OVER'S REPORTS
VITAL T0F|NANCE
Exports of Gold and Larger
Imports Sure to Strengthen
Business Outlook.
BOND TRADERS WAITING
Stability in High Grade Securities
Noted in Market Dur
ing Week.
BOND TRADERS WAITING
RY BYRON SELLER.

RY BYRON SELLER.
Special Dispatch to The Star.
NEW YORK. December 30.-Secre-
tary OF Commerce Hoover is credited
with two statements this week, both
Of which have a vital bearing on the
future of the securities market and
of the business outlook. First was
the expression of opinion that the
time will shortly be at hand when
the enormous stock of gold held in
this country will begin to be dimin-
ished by exports. The other was the
statement that statistics covering I'M
ports for October and November will
show an increase in such imports, the
new tariff law notwithstanding.
AS to the first of these matters, 1t
has long been held by some econo-
mists that our. huge surplus Of gold
constitutes a positive menace in it's
threat of imitation. A good deal of
the rise in speculative securities dur
ing the past year was ascribed by
these economists to our abundant
money supply. If so, and Secretary
Hoorer's prediction is verified. that
danger will be removed. but the re-
moval will take with 1t one of the
causes for the advance in the price
of both securities and commodities.
AS to the second matter, the belief
has been freely expressed that under
not prosper. Mr.. Hoover is. of course.
in the position to know the facts. and
theories are Of no importance when
they conflict with facts.
Bond Traders Waiting.
How far speculators and investors
are consciously Influenced by consid-
erations of this kind Is uncertain. 1t
is fact. however, that there has
been no sign of any large advance in
the price of high-grade securities this
week. Even liberty bonds. which
have been very slowly rising for Il
considerable period, wavered on some
of the days Of the week. The same
was true to a greater or less degree
of all securities, prices Of which are
responsive only to money market and
fundamental conditions. Investors
simply desirous Of buying for income
tations, but they did not rush to bid
up the price.
Financial institutions. which are
always large buyers of high grade Sc
curities. supplied their needs only
when price and quality met their
situation could best be described by
saying that both buyers and sellers
were confident of a fair degree of sta
bility in the market for prime secu-
rites.
There is. of course. another impor-
tant factor affecting even the purely
investment issues-namely. the busi-
ness situation. A long period Of good
trade results in the accumulation Of
profits available for investment. This
process, however, Is a very slow one
and long before it begins to operate
on Investments it shows itself in the
speculative market.
Foreign Problems Unsolvcd.
This brings US to consideration of
the general business outlook. Here
the situation is not greatly different
from that prevailing a week ago. The
European problem is still unsolved.
The best that can be said Is that the
part America should take is under
constant discussion, in and out of
Congress.
In Paris, the entire reparations
question is to be reviewed at the con-
ference of the allied premiers next
week No one is greatly concerned
over the faces the Turks make at
Lausanne. Even the announcement
of the despatch of the British fleet to
the Dardanelles was received by the
markets with Indifference. 1t will be
quite another story when any real
progress is made toward the improve
ment of the European economic con-
dition whether that improvement is
made with or without the aid Of the
United States.
their troubles. Chairman Reed of the
Kansas Public Utilities Commission
that the Atchison spends
too much money for maintenance, and
Senator Johnson of California wants
railroads prohibited from declaring
dividends unless they have spent
enough money for maintenance, al
though it is equipment on which Mr..
Johnson lays the stress. 1t is Ger
tainly hard to please everybody.
Rail Earnings Better.
Meanwhile. earnings for November
generally made better showing
than those of the month before and
freight loadings are the heaviest on
record for this time of year. Prob.
attacks on the railroads. their most
serious difficulty is in their inability
or unwillinRness to compose their
difference with their employees.
This, of course, does not apply to
ali railroad executives. but some of
tHCIi StiiA SSOhA ~ 49, ASsAo
Is so important as to break the power
of the unions. AS to the right or
wrong OF this, the writer has no op1n-
ion to express, but the effect, on earn
ings is not encouraging even to
stockholders.
Aside from the foreign situation
and the troubles of the railroads all
are still for industrial ac-
tiyity and reasonable profits for we'll
industries. The automobile
trade looks forward to a great sea-
SON and as a preliminary of the auto
mobile show prices of motor stocks
have been marked up.
Copper Prices Higher.
1t must be admitted that income
and balance sheets in most
cases Justify the advance. Talk about
the automobile industry having
reached the saturation point is not
heard very often just now. Steel
business is phenomenally good. There
has been a further rise In commodity
prices. particularly of copper. Sugar
people look forward to a prosperous
year and even the rubber and tire
folks are not without hope. And so
Ali things considered there is no rea-
SON to be anything but conservatively
cheerful.
Copyright. 1927