Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-09-03
BY STUART p. WEST
Special Correspondent Of The Great falls Trb'

Special Correspondent OF The Great fans Tribune.
Copyright. 1922. by The Great Falls Tribune
New York, Sept. 2.-The advance on
the stock exchange has kept up this
week with no signs of a halt. Carrier
prices have advanced to new high
points. 1t has been accompanied by a
gradually increasing volume OF business,
indicating that interest in the wall
Street situation is widening. The Sc
acurity market has persistently set its
face against anything unfavorable in
the outside news to the CONSERVATION
OF many observers who cannot see why
the coal and railway strikes at home
and the financial crisis in central Eu-
rope should have been SO left out of
calculations.
The explanation is simply that the
the forces making for higher prices
have been so powerful that other con-
~siderations lending to promote caution
and misgiving have seemed of inferior
appearance.
Heavy Loss From Strikes
The five months tie-up at the coal
mines has involved a heavy economic
loss. 1t has hit certain company earn
ings pretty hard. 1t has been distinct
ly bad for some of the weaker rail
roads. But after all, these are matters
of temporary consequence. With the
mines starting up, the losses in the
course of the next few months will be
recouped in part. The rest will be
easily absorbed by all well financed
companies through their surplus &C
count.
Strikes. no matter how costly, do not
affect security values in the long run.
Had the soft coal suspensions continued
for a month or so longer, it would un-
il~,A@1II- ho-a hoh Cnrln1C n0nSp-
ouences upon business life of the coun-
try. But the mines are now rapidly
getting back to maximum production.
An agreement in the anthracite fields
seems assured. This leaves only the
strike of railroad shopmen, which has
never caused any real apprehension,
because it has not curtailed railway ia
c%ilities to any important degree and be-
cause it has been obviously on the
Tane.
America Has the Gold
In the financial situation, like that
of two years ago, the monetary DIS
bursement of the continent OF Europe
would nave had their reaction here.
AT that time there had been great III
flation and over speculation n IN
consequence the undertone was weak.
The present situation is quite dltter-
SuJ. al llIlCooO ~ 49,
has also occurred.
Our gold supply, when the nations
of the world were shipping all they
could possibly spare in payment OF wal
purchases, did not begin to appear as
a factor until after the industrial slump
of 192O-21. Previous to that time IL
had been needed as a prop to the huge
credit structure reared upon the amor
nal production and abnormal pressure
of the postwar periods.
Gold Converted to Free Capital
When the great wave of liquidation
came and a year ago finally ran Its
course. it uncovered this vast store
of gold. converting it from mixed to
free capital. The result was what
might really be called a gold imitation
The two phases of this initiation as
thew have appeared during the last
10 months are, first, a steady pressing
down of the interest rate and. second
a steady rise in investment values
which are governed by the relative
cheapness or nearness OF money.
The economic processes possessed
are SO inexoriable in their workings
that they grind down all opposition.
This is why the domestic labor troubles
have not availed to check the markets
swing forward and why all the I'M
certainty over German repaFdIiohs
has not counted more than it has.
General Trade a Factor
The downward tendency of interest
rates must. of course, be supported by
a satisfactory volume of general trade
and by the assurance that this will
continue. There must be reasonable
certainty Of earnings sufficient to
maintain existing interest and divl-
dends. But granting this much, the
money rate is the conclusive factor.
II has to be remembered that our
railways and manufacturing corpora
tions have got back to normal earn
ing power without the assistance OF
recovery in foreign trade. This IS one
essential reason why the troubles of
continental Europe have not found our
situation more sensational.
The reason is that Europe no longer
has immense holdings of American
stock and bonds that might be thrown
over in case Of a smash. The balance
of security ownership has shifted to
our side.
Germany Gains a Point
1t is too early as yet to judge just
how much relief to the European posi-
ton will come from the new arrange
ment regarding reparations. Germany