Evening star., 1923-07-01
BREAK / A j Stocks I.
PARTLY-EX|PLA|NED
New Securities, Ford Boom
and Railroad Fears Are
Among Bear Factors.
WAGES ALSO ALARMING.
Credit and General Business De-
claTed Sound-Merchants Are
/ Not 0verstocked.
Hf GEORGE p. HUGHES.

D-spaIeH 10 Ne star.
NEW YORK, June 30.-The week in
"ail street has been one of alternate
rear and hope. bat mostly fear. This
is a normal condition of speculative
market This week. however. the al
formations in mood have been more,
rapid and violent than in months.
Inc immediate cause of the dire
foreboding was the spectacle of
Sharply declining prices afforded by
lhe STOCK market on Wednesday and
the hrst half of Thursday. The specu-
IatiVe community was greatly i'm
pressed by the fact that the "ayer--
ages" had broken through the pre-.
vious low established last November
1t Immediately began to look about
Tor the cause and, more important
stili' to attempt to make up its mind
what it was that the market was now
discountfng."
Now as to these latter matters
there was no universally accepted
opinion; All sorts of explanations
entirely convincing.
Factors Causing Decline.
A great deal of attention was maid
TO the advice given to its clients by
q well known statistical service To
the erect that the market was in
LOT AT least year of declining prices i,
me lact that this same professional
adviser considerably modified his
opinion later in the week did not
alter the effect.
Then, too, the views of a certain
professional speculator whose mas
1eet of considerable literary embcl--
!ishmeHt. which views were said to-
be very pessimistic as to the future
OF security prices. added to the gloom.
~ may serve useful purpose to-
set down some obstacles to continued
prosperity which were more or less
seriously discussed while prices were.
railing away most rapidly. One of
these, and a very real one TO the Wall,
street mind, was found in the vast
outpourfng of new securities, many
of which are still undigested
i Ihese securities cover a wide range
as to quality from bonds of real in
vestment merit to common stocks OF.
and traders were especially bitter
over modern methods of bond sales
manship.
Methods Called Mistake.
The conservative view is that il ia
mistake to apply the same methoSs
to the distribution of investment
securities that are used in the sale of
automobiles. In the rush to marke /
new offerings, seasoned securities
have been neglected. metimes. too.
the Offering price has been away
above the market, in which case, OF
course, the syndicate was the princi-
pal sufferer.
1t is an open secret in invest tment
circles that r certain foreign govern
ment issue, not a recent Offering, was
brought out $50 Tar above the market
that 1t is still undistributed.*4Al this
ties UP a lot of money and so has a
very marked effect on prices.
Wall street also is greatly. disturbed
noted with interest the prominence OF
Henry Ford in the poll taken by "a
well known weekly Of the presidential
preferences of its readers.
Ford Boom Causes Worry.
Now Wall street respects Henry,
Ford. but does not love him. While
it does not believe that he win be
it is impressed with the testimony
that this favor shown to, Mr.. Ford
gives feeling of unrest almost
country wide an unrest which might
easily be translated into radical
action in the next, Congress. Reports
from the middle west agricultural
section are especially disturbing.
1t may well have been the fear that
the farmer would demand and obtain
a reduction in railway rates that led
to the selling of railroad stocks this
week. 1t is not intended hereto say
that this concern is Justined. .rThsre
is no doubt, however, that 1t exists.
The labor situation also is not
pleasing to those who are accustomed
to buy stocks with the idea Of sell
ing them to someone else. later or
at a higher price. There is too much
raising of wages and too much talk
of more raising of wages.
Little by little the railroads are
finding II necessary to increase the
compensation of their employees.
ious. Now there is added worry over
possible anthracite cCal strike.
Here and there, there Is an optimist
that points out that high wages in
crease the purchasing power of the
wage. Garner. but for the most part
ed wages mean decreased profits to
the corporations. the stock of which
is dealt in on the. exchanges
Bright Side Of Picture.
| Now for the other side. No one
| strain or likely to be one. No one
asserts that there are any unduly
swollen Inventories. No one claims
that merchants are overstocked with
goods. And the Federal Reserve
Board, which ought to know, says
that the general business and finan..
cial condition is entirely sound and
that prosperity is distinctly not
threa tened with collapse.
Probably nine-tenths of the coun-
try's business men agree with the
Federal Reserve Board, provided
they are not under the spell, as are
wall street SPECTATORS, of the little
machine that prints huctuating
! prices in stocks and bonds.
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