San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-10-21
FOREIGN NEWS
D|SCOUNTED|N
BOND MARKET
Spectators, However, APP
pear Uncertain and
Nervous.
STERLING DECLINES.
Drop Follows Rumor Brit
ain to Adopt Infla-
ton Policy.
STERLING DECLINES
BY BYRON SELLER.

Copyright, by the san Antonio Light
New York, Oct. :O.-Two features
stand out in any consideration of the
course Of the financial markets Of
the week. One is the uncertainty and
nervousness exhibited by spectators
in both securities and in commodities.
The other is the comparative indif-
ference toward foreign affairs shown
by the American stock and bond mar
kcts with only foreign exchange, cot
ton and wheat sensitive to news from
abroad.
illustrating this uncertainty in the
minds of SPECTATORS two incidents
may be uJ-d, one important and the
other unimportant. The first is the
selling of sterling exchange on the
report that the British government
was about to adopt policy of de-
liDerate initiation.
The furry that this report caused
was evidence of a nervousness that
took no account either OF the proba-
biities of the situation or of the es-
tablished reputation OF Great Britain
for sound financial policy. How any
one could imagine that, with the Ger
man object lesson in financial sui
eide in plain view. the most constr
vatiye, most experienced bankers and
statesmen OF the world could be con-
tempiating a complete reversal of
their rolicy, purs1-d amid difficulties
Of the greatest magnitude ever since
the close OF the war, is not easy 10
explain.
An Unimportant Incident.
The other happening. in itself not
TO be tr-ated seriously, was the whis-
pered report that spread through the
street about the middle Of the week
that certain very eminent trader
Just returned from abroad was about
TO give out an important statement,
expressive of his views and that these
views were contrary to those held b.
the operators for a decline in stocks.
The amount of attention that was
paid this rco9rt was fair meas
ure of the mental calibre that express
es itself i'll the present day fluctua-
tons in prices. 1t would be going too
far to say that the stock market had
abandoned its traditional function of
forecasting trad, conditions. 1t is
plain. however. that under present cir
CumstGnces little stress should be
put upon the significance of changes
in quotations.
German Crisis Ignored.
Tb, second feature is the way in
which the rapidly developing crisis
i'll Germany has been ignored COM
pletely by American markets. With
the German mark depreciating to the
extreme limit of wortnl.sSness AMI
with civil war apparently imminent,
inrn-lApa nj
tinue to be absorbed in domestic af-
fairs. This is evident not only in
stocks, but in bonds. Foreign dol
ly moved. Notwithstanding the fact
that-must react gravely upon all
Europe. The foreign exchanges, as
already pointed out, have shawn signs
kct has been not a little disturbed.
But, French dollar bonds traded in
here, have either held steady or movad
only fractionally downward.
1t was quite different last Febru-
airy when the French invaded the
Ruhr. 1t may be that talk of a crisis
abroad has been hard so often that
it no longer has any effect. 1t may
be tnat the foreign bond market in
dicates belief that the situation on
the other side is not so bad as it
seems and eventual recovery will come
because it must. In any case, it is
striking phenomenon.
Tax Revision Important.
Aside from the trade outlook, which
is not yet clear. political Developments
OF the next bw months to come have
vitality important bearing on the
future Of securities. The Importance
of the attitude of Congress toward the
railroads has been discussed repeated
ly. Tax revision has come to the
front this week rs of equal import
ancc. 1t has been publicly admitted
by an administration senator that Sec
rotary Melons recommendation for
the reduction and reimbursement of
taxes could be carrisd out to the
amount of $J0O,000,000 provided that
Congress makes no new and extraor-
binary demands upon the treasury.
The secretary has contended all
along and the best expert opinion
supports him, that reduction of tn,
higher surfaces would actually in
crease. the public revenue. On the
other hand is the common belief that
tut new tOuyTcSS Will pass DOHCs
bill. Any increase or decrease in in
come tax rates will be reflected
promptly in the quotations for invest
ment securities. 1t is one Of the UNI
certain factors which an investor,
nresent or prospective. must weigh.
Release Of large incomes from high
surtaXes would fee that much. capital
| for productive enterprise. On the
contrary new issues of government ST.
curities or additional taxes to pro
vide funds for so-ealled "adiustcd
conversation" for former soldiers
could not but affect adversely, not
only outstanding liberty bonds, but
other high grade Investments.
May Reduce Rates.
As to the railroads, the suggestion
by President Coolidge that rates on
wheat and coal for export be H.
duced was followed by selling of the
shares of those railroads least in Q
upsition to accept any loss of in.
come. That the roads, the stocks ol
which suffered the most marketwise
were not those which carry the wheat
or the coal, once these commodities
are taken for export is not important
/ Tho cuOCastian is fokan IN confirm