Evening star., 1923-08-13
EUROPE'S SLUMPS
FACTOR IN MARKET
Review of Situation, With
Possible Rupture of Entente
in Ruhr Considered.
Special Dispatch to The Star.

special Dispatch to The Star.
WALL STREET, NEW YORK, Au-
gust 13.-Today's dealings afforded
the clearest test yet given of the i'm
portancr of the European situation
as a factor in the markets.
Over Sunday had come the news Of
the German cabinet overturn. Also
the terms of the note from Great
Britain to France had been officially
published. There was no doubt that
rupture of the entente seemed nearer.
Great Britain had declared the Ruhr
venture illegal and had limited at
further action to bring the question
directly before the bar of interna-
tional public opinion. France was eX-
pected to maintain her unyleldinS at
titude. and thus a succession of In
terchanges was foreshadowed. each
one drawing wider the breach.
Reflected I'm Finances.
The financial markets of the day
expressed their opinion in no uncer-
tain tones French francs broke
badly again. French government and
municipal issues were very weak in
all the markets. For the moment
Belgian francs were held up by the
restrictive measures which the Brus-
sells government has adopted to check
bonds showed the strain.
French francs were selling today
around 5.54 cents, compared with the
Eigh of 7.i2 just prior to the French
going into the Ruhr. Belgian francs
around i.50. compared with 6.92, the
high of early January.
This very severe shrinkage Is a
measure of the Judgment OF the world
at large regarding the whole Fran
Co-Be!gian exploit. Defenders of the
Dbl Ett n M IL 4.
out that the decline in the franc Is
due to some other cause. Recently
they have tried to make out that
England was engaged in bear ma
nipUlation" to enforce her view.
These theories are regarded as in
teusely silly. French and Belgian
currencies are sinking rapidly be-
cause these countries are facing
crushing deficits in their budgets in
case of the failure OF German repa-
rations and this failure. in the eyes
OF the financial world. appears every
day to assume a greater degree Of
probability.
The sole response to the bad for
cign news, so far as the security
markets were concerned, was con-
fined to the foreign government sec
ton. Other bonds did not go down.
Stocks. after somewhat uncertain
opening, were inclined to 10 better.
Three Conclusions Drawn.
There We're three conclusions that
might have been drawn from the
stock market Of the day. The first
was that the home traders position
caused the recent decline more than
the uncertainties abroad. The sec
ona was that European possibilities
and their reaction upon American n
business are something about which
there has been a great deal of ex-
aggeration. The third is that stock
exchange prices are down to a level
where they are no longer sensitive
to pessimiStic talk.
Beyond the fact. however, that SELL
ing was confined to two or three in
dividual stocks the market was ur-
important. But there was no sign of
any uneasineSs. Spectators working
for the decline who recently were
calling attention to the way good
news was falling fiat. were con-
fronted with the opposite spectacle
of bad news" having no effect. This
Influenced, more or less. short cover
ing. and the demand for short ac-
count kept the market steady, with
here and there some gains.