Evening star., 1923-06-10
RECENT REACTION !.
APPEARS CHECKED
Trade Statistics Are Sur
prisingIy Good-Buying
Power Widespread.
AUTO OUTPUT HOLDS UP
Gold Surplus Causes Worry-Ruhr
Problem Unsettled-Austrian
Loan Reveals Thrift.
BY GEORGE It. HUGHES.
.cial Dispatch TO The Star

BY GEORGE II. Hughes,
Special Dispatch 10 The Star.
NEW YORK, June ALI the avail
able evidence goes to show that
business men the country over have
largely recovered from the timidity
induced by the food of warnings
against overeXpansiou. There is no
doubt that the warning business,
from both official and unofficial
sources, was overdone. With the ex-
perienco of two years ago fresh In
mind. business. interests were quick
10 take alarm, quicker. in fact, than
actual conditions justified.
Both sides recognize that now.
There never was any real similarity
between the genuine recovery III 1928
and the reckless duplication of orders
and bidding up of prices which pre-
ceded the collapse of 1921. Then
frozen securities We're almost uniyer-
sal. Now there is an embarrassing
abundance. with the rediscount ia
cilities with the federal reserve sys-
tenn hardl! touched.
How far the recent reaction, or
better. hesitation, went cannot be
told The gratifying development Is
that the present disposition is to go
ahead, with confidence mixed with
caution. Trade statistics OF the week
itre surprisingly good. For the Hrst
time this year car loadings passed
The million mark.
Prosperity Evidence.
More significant still IS the fact thai
the total for the week ending May
26, the latest for which returns are
available, has been surpassed only
twice in the history OF the country
The increase was especially notice
able in the loadings of the mer-
,handise and miscellaneous freight
generally accepted as an accurate In
.lication Of the trend or general busi'
ness
Coincident with these carloadings
returns are earnings statements
showing that April net operating IN
come on the class ! railroads repre-,
sents 4 return on an annual basis OF
5a per cent of the Interstate Com
merce Commission tentative Valua'
zion This is the highest return earn
Cd in any month since the passage
OF the transportation act
Heavy Auto Output.
The record of motor vehicle pro-
duction for May tells the same story
Inasmuch as the first four months ol
the year had made new high figures
it was expected that there would be
falling off in May. Sues was not tne
case. On the contrary, total pro
duction OF cars and trucks to tht
amount Of 4o4,992 was q per cen, cent
in excess Of April and 81 per cent
more than in May a year ago.
In the steel trade the present high
rate OF production has apparently
reached the peak. and orders on the
books aro 50 large that no great IN
creas- is expected for, some time
The New York Central, however, has
Just placed one Of the largest ran
orders Of the year, amo ountlES te
1900 tons, four steel companies
sharing the business.
plenty of Buying Power.
Now all these statistics do not re-
veal the position of the ultimate con-
zurner. but, on the other hand, there
IS nothing TO indicate any lack OF ouy-
ing power anywhere. Even with the
agricultural population there is Sreal
Improvement, and less is heard apout
the lack Of adjustment between the
price Of the product the farmer has
to sell and the price Of the goods ne
must buy.
There is practically no unemploy-
neut anywhere, and good wages al
ways increase demands on the re
taller. Even the movement to matt
building construction because Of the
high cost Of Ia bor and materials does
not receive today the emphasis OF q
week ago.
The banking position continues
much as last week Gold reserves
show another gain, and the econ
omiSts are still busy Cevising more or
less workable schemes to prevent this
surplus becoming menace.
Turning to conditions abroad, the
Immediate situation is very confus-
ing. The French are not inclined TO
accept the new German offer, and the
toreign exchange market does not
G,Dint to any near agreement. The
best that can be said is that the way
-rr- q
British seem to think j. forward step
has been taken.
Austrian Loan Vital.
T: was not to be expected that a
solution of the reparationS problem
rhe greatest obstacle in the way Of the
return to normal world conditions.
should be reached overnight. 1t is
also generally true that any long
range forecast based on political in
stead OF economic factors is mislead-
ing
More Importance should be at
tnrhed to the evidence of economy
afforded by the new Austrian loan. A
Fear ago the position of Austria
looked as hopeless as could we'll be
Imagined. Vienna was referred to as
dying city. and the new republic
SEorn of natural resources and trade
advantages, was regarded as doomed
Today. under international co-opera-
. ion, Austrian bonds are being placed
IN New York, London and Paris. Not
only are the chief European nations
Wiling to guarantee this Austrian
loan, but the actual Austrian rev.
enues, pledged for it's service. are
adequate to meet ali charges almost
twice over.
Quick Recovery Some Day.
Il takes more optimism TO discern
Improvement in Germany. Certainly
there is no hope for present German
currency.
Attempts to stabilize" the mark
have signally failed, as every one
l.new they must fail as long as the
nlesses continued to turn out new
notes in geometrically increasing
quantities.
But to say there is no hope for the
German mark, is not to say that there
- no hope for Germany. When once
The inevitable, even If ong-delayed
agreement with France comes, the re.
coyery will be as rapid in Germany
as was the salvaging of Austria
How 1t will come, no one can pre-
dict. but just as sure as water finds
it's level will trade find the way.
Copyright, 1927