The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1923-07-21
MARKET RISES
FROM LONG
INERTIA
Ability to Hold Ground Is ONLY
Thing Needed
Now.
BY w. p. EDWARDS.
Copyright. 1929. by Cosmopolitan
News Service.)

NEW YORK, July 21.-Althousn
dullness, usual at this period of the
year, was the predominating char
acteristic Of stock trading durins
the past week, signs showed tina,
the market was slowly emerging
from it's prolonged state of inertia.
During the first few days repeated
efforts were made by the bear
party to bring out further nouida.
ton, using the dcmoralized condi.
tons III the grain market as the
principal argument for attack, but
the extreme dullness following these
drives made 1t increasingly evident
that there had been a complete
cessation of such forced liquidation
as occurred three or four weeks
ago.
The markets ability to hold its
ground in the face Of bearish news
items was widely construed in the
financial district as the reason for q
more cheerful sentiment toward
the immediate future. All that was
needed to arouse speculative IN.
terest was stimulant, which came
In the form Of a sharp recoil IN
wheat options in the latter part of
the week. Influenced by heavy
covering, q forward movement got
under way comprising practically
all classes Of stock and carrying
recognized leaders materially above
recent low levels.
Wheat Rallies.
1t Is Of course too early to de-
termtne whether the appreciation
In stock values actually forecasts
favorable business conditions in the
fall, or whether the upward swing
Ia solely based on the withdrawal
OF an extensive short interest built
up in the last three months. The
rally in wheat, which put the July
and September options back to 81
a bushel, did not remove the under
lying causes Of the decline, namely
the ability of Canada and South
America to undersell the American
market by a substantial margin and
the apathetic attitude of foreign
buyers. No doubt the recovery was
accelerated by the nationwide agira.
ton to broaden the general demand
by inducing investors to buy 1000
bushels Of wheat" It is regarded
VAbA CAACAJ uOoDLLOAp AO"CNCIy "HclH"
er this would remedy the situation.
What would happen to the market
IL called upon to absorb a wholesale
dumping Of these contracts with the
approach OF delivery day, is easy 10
imagine.
Industrially, conditions in the
steel industry. the most important
business barometer of the country,
call for a great deal of caution.
Authoritative trade reviews pre-
dict a sharp reduction in pig iron
production in the next thirty days,
although on the other hand, many
OF the large construction companies
are again willing to bid on con-
tracts, due to a slight decline in
building costs and an easier labor
situation.
OIL Situation Bad.
The demoralized state of the ne.
troleum industry was further en-
phasized by the ever-increasing
crude oil production, in spite of re-
ports of salt water entering certain
California fields. Measures to dis
courage drilling operations, such as
pro.rating by pipe line companies,
suspension of refining activities in
the Mid-Continent fields and reduc-
ton of crude prices were futile.
That the real remedy lies at the
wells is becoming increasingly plain
A radical cut in production, bring
ing the supply in more normal re.
lationship to the demand, is the
only and logical way to restore the
equilibrium in the industry.
Offsetting these unfavorable fac
tors are the increasing steadi-
ness in the copper and rubber mar
kets, the unprecedented car load
ings, the rise in sterling, and the
easy credit conditions.
Summing up, the general disposi-
ton in business quarters is to move
carefully but the economic situa-
ton is sound and warrants conf
dence. Inventories are not large
and there Is no undue initiation of
credit.
News Is Encouraging.
News from Europe was more en-
couraging, although the attitude of
France in the reparation matter Is
still not much changed. The British
note to Germany has been com.
pleted and is ready for dispatch. 1t
will inform Berlin that passive re-
sistance is hindering any settlement,
proposes an international commits.
sion of experts to deter mine Ger
many's capacity to pay, and also
contains additional guarantees for
France in the matter Of German
payments.
The money market was steady all
week. Call money ruled around s
per cent.