San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-04-22
STOCKS FEEL
FULL EFFECTS
Of FAST PACE
Disastrous Initiation May
Follow Further Trade
Expansion.
CALL MONEY EASIER
Pause From Feverish Ac-
tiyity of Last Month
Is Desirable.
By STUART z. WEST.

BY STUART =. WEST.
Copyright, by The San Antonio Light.
New York, April 21.-The foremost
topic Of discussion at the close of the
present wee!; is whether or not the
general business movement can con-
tinue at the pace set during the last
two months without involving the dan
ger of initiation and another unpleas-
ant experience like that of three years
ago. This is by no means n new sub
jet, although misgivings openly ex-
pressed have become more of n factor
in the markets.
In this article week ago, the opin-
ion was given that trade expansion
had gone about as far as it was likely
to go. With the steel mills operating
above so per cent of capacity, with
manufacturers of wooden and cotton
goods working overtime, with record
output of pig iron and with railroads
handling the largest traffic ever
known at this season, there was little
more to be expected in the way Of in
crease.
Price Movement a Big Factor.
But it is quite Il different thing to
say that the business volume has
reached its peak and that serious
downward turn is imminent. Every
thing depends upon the future price
movement. If a halt is not called upon
the advance in commodity prices it is
conceded on all sides that consump-
ton will be curtailed and then a seri-
Gus reaction will set in If, on the
contrary, the tendency toward rising
prices is checked, there is no reason
to look for any important change from
-esent conditions.
Production Up, But Prices Low.
The Department of Commerce sum-
mariZing results for March has shown
that production, in many lines, is well
up TO the top of three years ago; but
pit also points out that wholesale
prices, on the average, are still 81 per
cent away from the high of that time.
This is one of the two most impor-
tant elements of difference between the
situation now and that of 1920. The
second is that. SO far, neither the great
enlargement OF trade nor the advance
I'm security prices has brought any
strain upon the credit structure. The
banks have depended upon their own
resources TO meet the increased de-
mandS and have been very sparing in
heir use of the rcdiScount facilities Of
he federal reserve.
There is Il million dollars more Of
gold in the country today than there
was in 1919. and while this is temp
ration TO initiation. it is an immense
extra credi. reserve.
Call Money Easier.
The comparison between the 40la
per cent federal reserve ratio of May,
$40, and the present 1914 per cent.
must always be insisted upon in reply
o any charge that the financial situa-
ion is approaching the danger stage.
instead of the marking up of official
discounts which Wall street was ap-
pretending Il month ago. the past week
las seen easier rates for call money
and for bankers acceptauces and de-
.idedly larger offerings Of this funds
ht the concession demanded by bor-
overs.
output oil New securities.
The two features which must be re-
tarded as unfavorable have often been
et forth and discussed. The first is
he increase in wages. which now has
become nationwide, the other, the ex-
,essiye outpOur of new securities. A
4RHtron where wage costs are on the
Increase and where business men are
fraid to meet these with further
Irice advance, means smaller profit
nargins.
This is consideration which has
een in the stock market for the last
month. 1t means that the enthusiastic
calculations of two months ago regard
ne company earnings, have had to be
evised.
1t has also been recognized that the
ssuing of new securities has been car
led too far likewise. 1t has shown
much as has the higher interest
ate in the investment market of the
asst six months. Its influence on the
took market is not so apparent be-
ause of the abundance of credit aud
he consequent ability of underwriting
indicates to carry indefinitely what
hey cannot readily sell. But it does
nply competition with the older
sted stocks which is an obstacle to
perations for the rise.
Trade Pause Desirable.
Nothing has appeared in the trade
ews of the week to warrant any feel
IL of pessimism. Such pause as has
,curred from the fcverish activity Of
st month. is altogether desirable. 1t
good thing that steel buyers no
pnger have 10 pay premiums for
rompt delivery and that prices have
cen shaded. The break in the specu-
tive cotton market is favorable for
be outlook in cotton goods. There are
|yo technical instances which point
ward a check upon advancing prices
nd which are assurances that the sit
alton has been taken i'm time to pre-
ent a recurrence of the troubles in
p2O.
Sugar Position Strong.
The sugar trade is in quite differ
AZ position. for here all the recent
N ~Nds 10 support the lowered es-
mates Of the Cuban crop and hence
endorse the view that if there is no