San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-04-29
Dangerous Tendencies in
Business Situation
Are Checked.
MAY NOT BE LASTING
Uncertainty as to Answer
Is Explanation of
Quiet Trading.
BY STUART p. WEST.

Copyright by The San Antonio Light.
New York, April es.-Behavior of
the security markets this week has
. signified endorsement Of the view that
I. whatever dangerous tendencies there
: were in the business situation month
I ago have been checked in time.
( Whether or not the check will be
: lasting is the question at issue now
Z and uncertainty as TO the answer is
the explanation undoubtedly for the
quoting down on the stock exchange
and the more or less hesitating price
movement.
The chief difficulty has been the
over-eagerneSs in certain lines to do
the biggest possible business. PartIcu
larry has this been true in the build
ing trade and the result WAS the
forcing up of wages TO an exOrbitant
: height and the creation of 4 demand
for steel and other materiaiS enter
ing into construction enterprises Of
such urgency rs to threaten ~ abnor-
NAL advance in prices.
Situation Considerably Eased.
II was q distinct relief 10 learn
from the mid-weel: reviews OF the steel
trade that building contracts had
fallen off a third from the peak of
March. This alone, with the fact that
the more pressing requirements for
railway equipment have been met and
that users of steel in other directions
are well supplied for three TO six
months ahead, has eaSed the situation
considerably.
The volume OF consumption is still
enormous, but il no longer involves,
as it did a month ago, the risk of a
runaway buying movement. If things
continue this way initiation need not
be seriously feared. If, however. bust
ness men become over-enthusiastic
and extend themselves regardless of
what they have to pay for materials
and labor, then the outlook will be-
come cloudy once more.
The most remarkable phase of the
situation is the relation of trade ex-
pansion and bank credits. According
to the federal reserve board. produc-
ton throughout the country during
March was per cent above the high
est reached in the initiation era of
1920. Yet the latest combined state
ment of the twelve regional banks
showed that total rediscounts were
only S13J. 1000, 600 above the low of
January and were off S10I 100000
from the seasons high.
The reserve ratio for the system
as n whole stands at a. per cent
which is the high of the year while
the ratio of the New York Reserve
Bank is exactly where it was year
ago, that is. S6.4 per cent. This lat
ter fact is extremely interesting. 1t
shows how the members of the New
York clearing house have financed
the tremendous extra demands for
credit, resulting from the new security
issues and the rise in stock exchange
prices. with so little recourse to the
rediscount privilege, that the New
York bank is in financially the same
position rs it was last year at this
time.
Railway tonnage continues to break
AL records for this season and when
il comes to the crop moving, it is
virtually sure that the traffic state
ments arc showing that the gross
profits resulting from this huge freight
movement are not being eaten up as
they wore the month before by un-
usual operating costs.
Many in Wall street will saw that
the day for the "rails" has not vet
dawned. that in time the powers will
take them in hand and that the pub
lie. so apathetic now. will rush in to
buy. The other explanation some
times heard is not so satisfactory TO
holders of the railway shares. 1t is
that investment interests. looking far
ahead. that is. to the assembling of
the new congress with its strong anti
railroad bloc. prefer to see fewer rail-
road stocks and more of something
else in their strong boxes even at the
present time.
Immigration and Farmers.
1t is quite unpopular at the mo-
nient to take stand against the i'm.
migration restriction law. When the
chairman of the United States Steel
Corporation at the annual stockhold
crs meeting uttered some criticisms
he was roundly abused from many
quarters.
Politicians looking to 1924 do no,
care how much the law shortage
forces wages up and how much the
rise in wages forces prices up. All this
may have unpleasant consequences
later on. but SO long as these are de
layen another Is months II is good
politics to talk on the side Of uphold
ing the present state of things. Ont
contingency. however. will be awaited
with considerable interest and that il
the effect Of the general raising %
industrial wages upon the supply o
farm labor when it comes to the har
vest season.
When the farmers have to connect
against manufacturers who have jus
put up their pay rolls ten to fiftee
per cent. one ventures To say tina
much will he snid about the plight O
the rural districts seeing their laha
costs 20 up and the advantage OF III
rise in AGRICULTURAL prices in lars
corntcr-balancing.
The reaction 81 nm outcrv fro'
This quarter nnon III" political mini
viii be most interestin" 10 observe.
IarfT sUOr1RruI IL