The New York herald., 1922-07-24
FINANCIAL NEWS
AND COMMENT
Opposing Forces Meet, Conn
terbalancing Factors That
Move Stock Market.
INDUSTRIAL SIGNS GOOD
However, Strikes Are Disturb
ing Influence-Immediate
Future Uncertain.
INDUSTRIAL SIGNS GOOD

Forces which were very strongly op-
posed to one another acted last week to
shape the security markets and 1t was
not surprising, therefore. that the re-
suits were such as to make uncertain the
immediate future. The apparently grow
ing tension In the great strikes exercised
one sort of force; another came from
dustrial signs pointed toward a fairly
steady Improvement of business; a third.
the easy money situation stimulated in
vestments and afforded genuine sup
port to stocks when doubt about the
strikes caused moderate liquidation in
the second half OF the week.
OF these influences the second, by and
large, was Of the foremost Importance.
Steel company reports for the June guar
ter gave plain. evidence of much better
condition than existed early In this year
and vastly better than a year ago. The
Republic Iron and Steel Company never
Ing costs down in relatively dull times.
yet it was able to return a profit for the
three months. The Colorado Fuel and
Iron Company did so too. and the Gulf
a few products. came through with earn
ings that would have been satisfactory
In good times.
Industrial Reports Cheerful.
Cheerful deductions made from these
companies reports went far in offsetting
information that the strikes were caus-
ing the shutdown of blast furnaces in
the Ohio Valley and retarding the flow
of fuels and materials to the Pittsburgh
district. With new construction work
running at high levels, even more ac-
lively than In May and June. 1t was not
difficult for the stock market to visual
fze continued impulse to steel mill
activity.
| The fact that the strikes. II In force
for fortnight or month longer, might
react seriously upon manufacturing
profits was obscured by the larger out
look for active production In the last
quarter Of the year, In other words,
spectators paid relatively little atten-
tion to strike developments until some
OF the more tinid and cautious holders
Of stocks elected near the week end to
withdraw until the results OF private
negotiation or Government assistance
showed some positive results in settling
points In dispute
II the underlying strata Of market
confidence had not been pretty sound
some really severe reactions might have
followed the cuts Of petroleum and
gasoline prices. A fall Of so cents
barrel in crude oil in four days-with
the possibility OF other reductions in the
near future-indicated a heavy conges-
ton of supplies and consequent fall
Of inventory values on oil in storage.
The deduction to be made by a nervous
and superficial view OF the reaction
was that producing companies would be
forced to revise downward their pre-
vious estimates of earnings in 1922.
See Larger OIL Demand.
But II there was any disturbance
among stockowners It had very little
reflection In share quotations. Opinions
were not altered that az business gener-
ally enlarges there must be a persistent
demand for oil and its products and,
ergo. as business In improving, despite
temporary restrictions. the consumption
of oil is now on q scale Indicative Of
good profits.
The strong bulwark Of the markets
was the daily advance of Liberty bondr
to new high prices, referring to the AZ
per cents. The power of this demand
carried many railroad bonds along, and
when 1t Is recorded that q block of
$s,7oo.ooo Northern Pacific Is brought
subscriptions for nearly ten times the
amount offered. one would fnd difficulty
in being gloomy over the credit and
money outlook.
1t is true that easy money frequently
stands as q sign that general business
Is running below a state of normal vol
,ume. But 1t Is true also that a period
Of relaxed money enables corporations
to reduce their fixed charges through the
refunding Of old. high interest bearing
loans and to borrow capital at satisfac-
tory rates against the time when 1t will
be needed.
Easy Money Supports Stocks.
The stock market always figures on
things distant moro kseniy than on pres
ent happenings A money situation
which permits securities bought for the.
future to be carried at relatively low
cost In one which speaks for . strong
support OF prices and reluctant rssalss
by speculative owners of stocks and
bonds The az per cent. rate for Short
collateral time loans last week counted
far more than temporary bulses OF call
money from to Z and ~ per cent. in
determining the plans of stock market
followers.
There promises to be interesting de-
velopments this week in regard to the
Gnv,pop rano ro fiooo Dlot~I., D~txct.. l.