Evening star., 1923-03-18
BUSINESS REVIVAL
GOES ON IN LEAPS
How Far Conditions Have
Now Been Anticipated Big.
geSt Problem in Markets.
MONEY RATES STIFFEN
Heavy Increase in Income Taxes
Indicated-Conditions Are
Improving Abroad.
MONEY RATES STIFFEN
RI BYRON SELLER.
Special Dispatch TO The Star.

Special Dispatch TO The Star
NEW YORK, March 17.-Specula-
tion sentiment as to the future of the
market in both stocks and commodi-
tics is sharply divided today. The
chief reason for the stand taken by
those who believe that the advance
has gone far enough is that the re-
cqvHry from the lows of 1921 has
been 50 great. To this they add the
observation that there is a distinct
s;iffcning in money rates and that
tho federal reserve authorities will
never permit speculation to run away
arnistice period.
Meanwhile the business revival
COOS on in leaps and hounds The
reports may fairly he described as
startling. Railroad traffic is at the
highest point in American history
car loddingS not only gain week by
week but exceed all previous records
Tor this time of year. The increase
Is divided among all classes of com
moditics. For time ii was possible
10 assert that this phenomenal traf-
tic represented surplus accumulate ed
during the strike. That explanation
is no longer tenable.
Cotton Records Never EauaIed.
Activity in American cotton man
HIacturinc has never been equaled
II the SpinnerS continue to maxi
cotton cloth at the present rate there
VIII he practically no raw cotton
lcit IN the country by July 1 next
For instance, there are only 25.00C
unsold bales Of cotton in Memphis
today. II has never happened before
that Memphis did not carry over
hat I'M,
Production of iron aud steel is in
excess of wartime peaks The in
dustry is now Working at 90 per cent
ot capacity but that is equivalent tC
over 100 per cent existing during the
war. Prices of structural steel are
steadily advancing without haltinE
the demand. The automobile trade
has the same story to tell. activity
persists on a larger scale than ever
before at this time of year
Only rough estimates of income
tax returns can yet be made, but the
indications are that they arc very
large increases over 1922 And /,
must he remembered that maximum
SurtaN rates have been reduced and
that the excess profit taxes have been
wiped out. II is believed. however
that the number of individual returns
filed Will be a new record.
Commodities StiI Risinx.
Commodities still are rising. Cop
per, after hesitatinG around the IS
cent level, is again strong and zinc
IS selling at the highest price since
the summer of 1920. Crude oil has
been advanced in the face Of a record
output.
And yet with all this increa sing
trade activity and rising commodity
prices the supply of money and credit
is still ample. The Treasury's offer
ing of s400.000,000 in new certificates
of Indebtedness was oversubscribed
at least % per cent. New security
issues have met ready mark ct
Nervousness over the, prospect of an
advance in the rediscouDt rate by the
Federal Reserve Board has partIy
ahated. although, of course, such an
advance is at least probable if the
business review continues at it's pres
ent rate.
Foreign Outlook Better.
Looking abroad. the situation is
fdlstinctly improved. Reports persist
of negotiations, potential at best be-
tween Paris and Berlin for a settle
ment of the reparations dispute
french securities dealt in on the
market have shown firmness, and less
is heard about "bankruptcy' of ali
continental Europe. Great Britain
has made a payment on her debt TO
America. Indications also are not
lacking of reviving interest in
L
foreign investors
How all this will affect the securi :
ties market each must Judge for him
self. All experiences show that in
periods of rising commodity prices
and advancing charges for money the
market price of fixed interest rate
bearing securities declines
The investor demands a larger re-
turn for his money both because of
rising costs of living and because he
can get more in the outside market
4 And inasmuch as the coupon rate is
fixed. the only possible change is in
the price of the security.
Action In Bond Market.
This process is already going on in
the bond market. As for securities
which depend on their strength for
the Immediate outlook in the particu
lar corporation concerned. they move
IN the opposite direction from the
strictly investment issues. The only
dispute is between those who believe
or say they believe that the marke cts
have discounted the industrial
changes now taking place and those
who say such discounting is still to
come. Which party is correct only
Inc future can reveal
Copyright, 1921