The Birmingham age-herald., 1923-05-28
NATION CONTINUES PROSPEROUS BUT CAUTION SOUNDED
Steel Trade Measuring And Freight Traffic More
 Satisfactory

NfsN OINiNt Si+Nipy -A'2sN ciated Press. )-A change in sentiment rather than In underlying conditions marked the past week in the Coun- try's leading financial markets. While more favorable sentiment with re- gard to the general business outloo oll doubtless has been induced to cer- tain extent at least by the pro- nOunCed recovery in the stock mar ket, there is evidence also that more sober examination of the facts has had it's effect.
 Advices from the steel trade have been reassuring, commodity markets have firmed up, renewed interest in metals has been reported and rail road freight traffic has further eN= banded. Mercantile trade agencies, furthermore. while still clingins to caution in their reports are more prone to attribute such sla ackening IS has appeared in trade to natural sea sonal influences.
 Business is coming around to rec osnize what has been expected for sometime namely, that the pace has been a bit rapid to be maintained with Interruption Buying is now more for current needs than for tho future, but the belief is growing that with the summer digestive period over, demand will become more in sistent. What the fall will bring re- mains to be seen and much depends on how the labor situation shapes itself.
 Future Has Ray of Hope
 Even the latter is not without it's ray of hope. While strikes and threats of strikes undoubtedly are becoming more frequent and the week has brought further wage in creases, notably on a large railroad system. it Is known that labor lead CTS, particularly in the building trades are showing more conciliatory spirit. It is believed that they are becoming alarmed lest the situation get out of hand, as it did in 1919 and that too much prosperity may kill off all prosperity. They don't want their men to increase their demands to the extent that activities will be cur tailed or cease entirely. It would ap- pear that announcement of abandon ment of building plans is having a salutory effect on these guiding la bor's destines.
 That goods still are going into con- sumption in large volume is shown by the weekly carloading statistics. The latest figures available are those for the week which ended May 12, show total of 974531 cars loaded with revenue freight This not only es- tablishes a high record for all time for this season of the year. but comes
 
 recorded in the first week of last No Vember.
 Statements Looming Ont
 Meanwhile earnings statements covering operations during the month of April are beginning to ap- pear. For the roads that have re- ported so far net income is running somewhat below that for the pre- vious month but is substantially higher that last year.
 Making allowance for the fact that there are fewer working days in April than in March. net income. in the opinions of the most railroad au- thorities, should show percentage earned on valuation equal to if not higher than that for March. which was 5.S4 per cent. That net income is not higher, in view of the heavy car loadings, Is due to a large ex- tent to increased expenditures for de- | ferred maintenance and for new equipment. The roads appeared to | be making every effort to avoid d 1 duplication of last autm's freight congestion.
 The situation in the steel industry pretty well epitomizes that for indus try in general. Steel men say that | too much stress has been placed on | the slackness of forward buying. They | point out that the mills are operating | close to the high rate for the year and | that business on their books is suf- ficient to keep them running for a 1 long time to come. New bookings | for many of the mills, furthermore, | is almost as large as the volume they are shipping out Automobile out put also continues to exceed earlier predictions but d letup during the | summer may be expected.
 O o o A Healthy Sign
 a n uY,,,, .,,.;,, ', situation "it is regarded as a sign of | healthy conditions that the slacken- Ing came before anything rese emblng | runaway market had developed. | This is held to attest the fact that business men have been watching their step throughout the period of recovery and are not unmindful of the lessons of 1920"
 Commodity markets have shown | more strength. This is especially true of cotton. Late planting and unfavorable growing weather have brought reduced private estimates of | the crop and it's condition. Some | claim that even with a 10 per cent Increase in the acreage the crop may not exceed 12,500,000 tons At any rate strong speculative buying and | heavy covering movement in the old crop months brought sharp rise during the week. Profit taking ap- peared on the bulge, as was natural. but 1t was well absorbed Short | covering also was the chief factor in wheat in fears of smaller yield due to bad weather conditions
 Money has been fairly abundant and l cheaper despite recent government financing although no actual changes in rates have occurred. Those in close touch with banking conditions say that inability to place all avail able funds has resulted in re invest ment in securities by some institu- tions. Firmness in the bond market tends to confirm these reports.