Evening star., 1923-08-19
OUTLOOK
| FOR INDUSTRIES
Market, Both Speculative and
! Investment, ManifeSts
Confident Tone.
LESS POLITICAL WORRY
Weeks Trading Marked by Re-
vival of Interest in High
Grade Securities.
LESS POLITICAL WORRY
BY GEORGE II. HUGHES.

BY GEORGE II. HUGHES.
Special Dispatch to The Star.
NEW YORK. August 1S.-The Sc
curitAes markets, both speculative and
investment. have shown better tone
this week. There is more confidence
in the industrial outlook and less
worry about political development
Moreover, there has been remark
able resistance to unfavorable news.
The best example of this is the case
of the oil trade. While naturally
enough oil securities sold off follow
ing the price cuts so widely adver-
rised, there was very little effect upon
the rest of the market
Then, too, the alarm over the for
eign situation and the drastic drop in
French and Belgian francs has abated
for the moment. How long this i'm
provement will continue, of course,
nobody can say. Speculative senti-
ment is VIGOROUSLY unstable. 1t does
took, however. as If some new OBJ
staclG will have 10 be raised up be
fore the pcSSimiSm which has ruled
for the past few months resumes the
sway now broken.
Feature of Investment Situation.
In its way the investment situation
is fully as significant as the speculd-
5iXe. The week has been marked by
Il remarkable revival of interest in
high grade securities. In some ways
this was an unexpected development
Stocks and bonds OF second grade or
OF semi speculative status have been
selling 20 return very attractive
siSls nnG - T4n
For instance. stocks Of sound public
utilities listed on the New York
Stock Exchange have been quoted on
the basis To give the investor at cur
rent levels anywhere from to 10
Der cent. shares in automobile com
panieS seemed to be similarly attrac-
i've. although the slack season in the
aSlOmobile business : just about be-
ginning. and ther" are always those
who foreSee near approach of the
much -talked-about saturation point.
Junior bonds ot railroads. on-divi-
dend paya:S. SucH as the Erie. but
whose earnings are making steady
progress IN the right direction, have
also been selling at very low hSureS.
1t was natural to expect that this
grade Of stocks and bonds would re-
spond promptly TO the more hopeful
feeling. But the really important
change has been in the attitude of
investors. both private and institu-
highest grade. those about which
there is never any doubt as to quail
ity no matter what the business out
look NAV he Last week there was
some evidence of foreign buying in
AGericdn frSt-mort-dge rdilroad
bonds such As are legal investments
for savings banks in New York state.
This week this demand h ,d wfdened
10 include Inquiries from domestic
investors The result is dealers in
= Il O. I O.
For tn" first time in months they have
,.uturcd to anticipate an improving
bond market in the fall
Both Causes Influential.
How much of this Improvement is
due 70 restored Confdcnr" and how
much u an accumulation OF funds
Seeking investment Is matter Of
opinion. Probably both causes have
beep influential. It is the normal
order following ii long period of de-
preston for high grade bonds to
show the first sign of returning con
hdence- But the present situation is
quite different. There has been no
depression in business. There may
have been some reaction from the
high level of the spring. but that ii
has been Il serious reaction is not
generally believed. What has hap
pened is this: The three or four
months decline III stocks and the
vivid recollection of the experiences
Of 1921 have made investors so timid
that they are willing even now to
take no chances.
Foreign situation Disturbing.
The situation abroad is still replete
with disturbing possibilities. The un-
certainty shows itself more promi-
rently in the market for foreign
bonds. but it has its influence on do
mestic securities as we'll. I'm a vague
reaction upon our own prosperity of
any general upset in Europe. 1t is
question, however. how much this ad-
mittedly uufaVorable factor has been
discounted. At any rate il is not
looked upon with quite so much con-
cern just now And the two othercondi-
tions that weakened confidence. the
low price of wheat and the proba-
bility of political attack upon the
railroads in the new Congress, are not
so alarming. For one thing. the
wheat market shows signs of re-
covery and the politicians are not so
rociferious as to their Intentions.
The new farmer-labor senator from
Minnesota says while he is going to
fight at Washington for the interests
of his agricultural constituents he
intends no injury to business. Mean
while. there is practically no unem-
ployment, retail trade is good and
credit is abundant.
One Condition Undetermined.
There is one condition which no in
vestor can guard against by attention
to general business or to the flnan-
cial situation That is the changes
brought about by the progress of
science and invention. The case in
point is the competition between the
radio and the cable companies. More
important still is the competition be-
rween the trolley car and the gaso-
line driven private automobile and
iitncy bus This is we'll illustrated
hy the strike of the employees of the
public Service Corporation of New
weeks. During all this time the COM
pany has made no effort to run it's
cars and, more remarkable Yet, the
public seems to have suffered min
imum. of Inconvenience. For the
busses have filled the gap. partially
at least. Undoubtedly some sort Of
an agreement will be reached SO that
trolley service will be resumed.
Meanwhile. it is a matter upon
which holders of bonds secured upon
trolley roads will do well to ponder.
'rha railroads have suffered from
automobile competition as far as
passenger service is concerned. and
in some cases many local trains have
been discontinued. In the moving of
long g-distance freight they still have
the monopoly. With the electric
street railroads the situation is more
serious than with the steam rail-
roads.