San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-08-19
Intense Pessimism Evident
n Trading a Month
Ago Disappears.
OIL A WEAK SPOT
Drastic Cut in Production,
However, May Speed
Up Relief.
By STUART P. WEST.

~NCr iVih nus Acs"aN NuNAA AAc
points at the close of the week, stocks
have regained most Of their losses
since the first Of July. This in itself
is proof Of the disappearance of the
intense pessimism which governed
Wall street transactions q month ago.
II also bears out the contention that
the propaganda, either directly or in
directly designed TO undermine conf
dence in the business outlook to induce
cancellation Of orders along with cur
tailment of new buying and there6;
bring about serious recession, was
unvarranted and must fail because il
ought TO fail.
Over. Production Painful.
1t is difficult to discuss the trade
movement as if it were subject to GER
tain broad and general influences.
There are well defined instances OF
over.production. like oil. leather and
automobile tires. The latter have had
their sequel in costly price cutting. In
oil particularly only the very strong
est companies can operate at q profit
on present quotations. In leather. the
situation has been brought forth in
the deficits reported by the leading
companies for the second quarter of
the year.
There are other cases like the boot
and shoe trade and some branches OF
the metal trade, notably zinc, where
the margin Of profit has been eaten
up by the increase in wages. Finally
there is the much agitated position in
wheat and in certain kinds of live
stock, where INSTALLATIONS of foreign
requirements have led to a domestic
over-supply with consequent unprofit-
able levels.
Business Generally Excellent.
II these various industries were
fairly well representative Of business
as a whole, the situation would be dis.
tinctly unfavorable. But the cases con
sidered are plainly exceptions, They
denote no widespread tendency sucl
as was present three years ago-nC
wild speculation and price initiation
no over-stocking with high priced raj
materials and high cost finished goods
no excessive advances of credit. The
clearest picture of the business posi-
ton in general is furnished by the
record of the retail trade, which is
running 20 per cent or more ahead OF
a year ago, and by the railway ton
mage statistics which are showing the
largest freight haul in the history of
the country.
Oil the Weak Spot.
A summary Of the facts as they
stand at present would seem to be
that no general causes of depression
are at work; that for special reasons
conditions in a dozen or perhaps a
score of lines are not good, but thai
in the main body of industry, matters
are moving along satisfactorily. In sew
eral directions where there was doubt
up TO fortnight ago, there now is
assurance.
The sharp upward turn in cotton
awoke the goods trade to comparative
activity again.
The increased expense which the
steel companies will be under as thcy
shift from the twelve to eight-hour day
will probably lead to higher prices for
steel At least they insure against ans
reduction and this Strengthening OF
the price outlook has had its effect in
making steel consumers more anxious
about their future supplies.
Even with oil, which has been the
particular weak spot. the drastic price
cuts of the week are bound to speed
NJ the necessary readjustment. As tht
Standard Oil president pointed out
the present situation has resulted from
comparatively small amount of sell
ing by companies which were unabl,
10 hold on; therefore. it should no
last after this forced liquidation II
over.
Foreign Trade Favorable.
The July figures on the foreigi
trade, showing a balance Of s2G. 900.
900 in favor of the United States, wer,
an upset TO some very pretty theories
When earlier in the year there was
large excess of imports over exports
writers of the academic type were fon,
OF saying that foreign countries ha
begun TO settle their current debts i
goods instead of in gold and secur;
t'es. Another similar idea was tina;
being a creditor nation, we are in tn
position that England had been in 70
the last three-quarters of centur
where we were likely 10 have PEI
nanent excess of commodity import
IN return for the interest on Amer
lean capital loaned abroad.
IL Will Ut interesting 10 see no.
the proponents of these theories a
tempt to square themselves with III
July returns. in the meantime. Ii
practical view is that the heavy in
ports of the spring which swung Il
trade balance against us were mere'
a temporary incident Of the sho
lived domestic boom. When depict,
stocks of goods had been replenishC
and the feverish buying movement WI
over. the demand for foreign raw al
unfinished materials began to fall oI
Our export trade has dropped We
little comparatively; it was down
July only S365.000 from the high
March. But imports during the saT
period decreased S114, 100000 and
is this which tells the story.
Gold Initiation a Problem.
In consequence of the reversal
the trade balance gold imports a
again on the increase. England with
the next two months has to set
n credit against the next semi-annu
interest Of the war debt. IL she cam
do this through the increased sale
goods or through the sale of her ON
securities to American investors, S
must rely largely on transfers Of go