San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-03-11
STOCKS UP To
! EXTREME NOT
WARRANTE
Spectators Have Abused
Favorable Business
News.
PRICES MAY GO HIGHER
Rumors of Further Ad-
vance Regardless Of
Consequences.
PRICES MAY co HIGHER
BY STUART P. WEST.

Copyright, by Inc san Antonio Light.
New York, March 1O.-The whole
question before the Wall street mar
ket has been whether the rise in prices
has or has not discounted the i'm
provement in outside trades. There
is much difference of opinion. In
Ultra speculative circles, there is con-
tinued talk Of further boom regard
less Of the ultimate consequences. In
other quarters more sober-mirded
thought has been taken of the violence
of the recent advance in industrial
Saares and of the likelihood that spec
ulative interests have abused the op-
portunity afforded by the favorable
business news and easy credit condi-
tons and have forced prices up to an
extreme not warranted by actual
values.
Many things that have happened
during the last week or so, have
brought remembrances of November,
1919. and April, 1920. Some of the
marking up of industrial specialties
has been quite as wild and reckless
as anything witnessed in either of
pllose periods.
Still there are very important differ
cnces in favor of the present situation.
One is that credit is now abundant
where then it was scarce, another is
that there has not developed as yet
anything like the public craze for spec
ulation that there was at that time.
Danger Of Higher Money Rates.
The principal danger in the situa-
ton is that speculation will keep on at
the present pace when every day rising
prices and expanding production in
trade are making larger demands upon
lie money market. II this combina-
ION were continued for very long, it
. iuld certainly bring about further
aEccs in federal reserve rates.
'"l IS made of the decrease within
...'t month of some $S0,000,000 in
.,..scoupts of the New York bank.
: is pointed to as proof that the
'Gtion has involved no strain
yer uron bank resources, and
p" nSccuently there is no reason to
pate efforts to discourage con-
''''lcc OF the campaign.
-,-a.nst this, however is to be set the
llc; the speculative demands so far
: We been handled by the member
-t-.Ao " uANu Ddl-
arees released by the period of liquida-
ton beginning in the fall of 1920 and
continuing through the major part of
J321. The rediscount privilege there
fore, has not had to be invoked to any
important extent.
But If the speculative movement and
the business expansion were to con-
tinue the way they were going, it
would not be long before the federal
reserve institutions would begin to
feel the effect.
No Initiation In Industries.
In the country's industries gener-
ally. it cannot be said that any con-
siderable degree of initiation exists.
Certain lines like iron and steel, cot
ton and woollen goods, building con-
struction and railway equipment man.
ufacture have reached capacity produc-
ton and still are unable to keep pace
with the orders pouring in.
This situation necessarily has re-
suited in more or less rapid advance
In prices. But the point is that the
advance has not been aggravated I'M
duly by speculation. Rather, it has
been the logical result of the abnorm-
ally depleted stocks on hand as they
stood in the summer of 1921.
Consumers persisted in buying from
hand to mouth because they could not
Gee the business recovery that lay
ahead. The sequel was that they were
caught short of supplies for future use
when they awoke to the fact that the
tide had turned.
Labor Shortage Pressing.
At the moment. one of the disturb
ing problems is the scarcity Of labor,
--unskilled as well as skilled, resulting
from the restrictions in the new immi-
grafton laws. This threatens to lead
to a general pressure for higher wages.
and If this happens, the whole vicious
circle will begin to operate over again,
higher wages leading to higher prices,
higher prices to higher cost OF living
and end with renewed demand by the
laboring class for fresh upward ad-
iustments in their pay. II would seem
from rne standpoint of the security
marketssas well as from that of the
business outlook in general that there
could be no more unwelcome news at
+he present than announcement of in
creases in the wage scale.
Slack Demand for Bonds.
Another matter to consider more
seriously, is the let-down in the de-
mand for investment securities. This
has steadily become more of a feature
during the last six months, but it has
been particularly emphasized during
the past week. To the extent that the
weakening of the investment market
is due to higher money rates it is not
especially serious.
But to the extent that it is due TO
the enormous output Of new securities,
it is a subject deserving more atten-
tion. The suggestion is that il new
flototions keep Oh as they have been
the market will become overstocked
with securities which will be very diff
ficult to sell.
lE British Finances Improve.
The latest reports about business
conditions abroad are encouraging save
for the countries directly affected by
the Ruhr trouble. Great Britain IN
only three weeks, ending February "a
had an excess of receipts over expendi
lures of $2SJ. 100000. A budget sur
plus at the close of the fiscal year
large enough to warrant further reduc
ton In the personal income tax and