Evening star., 1923-10-07
MILL .SHUTDOWNS
SHOCK INDUSTRY
Lack OF Demand for Cotton !.
Goods Is Disturbing to ].
Whole Business World. :
BOND MARKET IMPROVES
Sharp Rise in Stocks Lasts But One
Day-Situation Abroad Still
Uncertain.
BY GEORGE II. HUGHES.


NEW YORK. October 6.-The out
standing. event in the security mar
kets OF the week was the sharp. al
most perpendicular advance in
stocks on Wednesday. Almost with
out warning the market turned about
and there was a scramble on the
part Of spectators for the decline
to cover their commitments. The re-
covery was not sustained, however.
and the speculative pessimism which
has reigned for the past month or
50 regained it's sway. It was ex-
plafned that the sudden recovery was
purely psychological" and that It
had no significance as to the long
range outlook either for securities
or for business.
Much was made Of the announce
ment that the largest cotton mill
in the world would close it's cotton
department today indefinitely as a re
suit of untoward business conditions
This, It was argued, showed that in
creased costs could not be passed on
to the consumer, and the inference
was drawn that like action would
be forced upon other manufacturers.
On the other side. it was asserted,
that local conditions as we'll as the
general market situation were infu-
entail In bringing about the shut
down of these particular mills and
that the southern manufacturers
would continue operations as usual
1t cannot be denied that this is q
disturbing development, but 1t must
be remembered that somewhat sim
liar occurrence IN the. building in
dustrv did not prove permanent. Last
spring there was suspension OF
building operations in New York and
some other large centers, due to the
prevailing high labor costs. The
situation then readjusted itself and
work was resumed.
Sugar Prices Came Back.
About the same time there was
also a revolt against the high price
Of sugar. with threats of govern
ment action and with an adverse
effect upon the quotations for the
securities Of sugar-producing com
panies. Sugar, however, Is back to
It's high price again; The fact is
needs which must be filled and that
demand may be relied upon to re-
awaken as the needs again become
pressing. When this will prove true
in cotton goods only time can reveal.
Aside from the news as to the cot
ton goods trade, there were no fresh
arguments put out by the prophets
Of reaction in securities. stress was
still laid on 'extravagance" In the
buying of automobiles. on the lack
Of thrift on the part of the general
public, and in 90 prepared statement
by the head of one brokerage house,
even on the amount Of money spent
ON admission to prize fights. movie
theaters and on the construction OF
golf courses.
Great Lack OF Thrift Seen.
This same authority admitted that
the savings banks had Increased
their deposits by 100000. 900 during
the last year. but alleged that much
At-tr f-fh tod hU ora
earners of foreign birth and did not
evidence any thrift on the part OF
Americans as a whole. --.-s
If the sharp advance Of Wednesday
was not followed up, there was at
least no substantial downward reac-
| tion except that which might have
been expected from the rapidity OF
| the rise. It Is also important to
note that sentiment in tlre bond
| market. which is more truly repre-
sentative Of investment Z, interest,
showed great improvement during
| the latter part Of the week. Except
| for weakness in United States gov
| counted for on several grounds. obli-
| cations of domestic corporations
| were very firm. This applies espe-
, cially to the speculative railroad
| issues. It looked as If at last there
was to be some response to good
| earning statements in the bonds sc
not in the stock market.
Care I'm Bond Purchasing.
The buying. whether for. specuia
| tive or investment account-and It
! is not easy to say which was pre-
1 discrimination. The two or three
| roads. the position of which is doubt
1 full, were neglected in favor of the
great majority, the outlook for which
still room for much more improve
1 ment. but the change in sentiment.
| slight though 1t may be, was very
| encouraging.
| OF the week was the testimony from
well Informed sources to the improved
!, conditions in agriculture. Certainly
! the corn farmers have no reason to
their products. Proposals for iegis-
tIation. in aid of the farmer also as
the time for the assembly of Congress
! draws near. are becoming more con-
: servative and all OF this has been
/ reflected more or less in the market
| price Of the securities of corporations
| doing business with the agricultural
populsfion.
\ Foreign Outlook Pushing.
| with farm prices on q basis that
allows reasonable purchasing power
!; for the producer and with turning
sound economically. two of the fac-
| tors which have operated to afrect
] security prices adversely will have
| There remains. of course. the for
| eien situation which is full OF nm
tcertaintfes. Predictions IS TO the out
| come on the other side are both
DANGEROUS and useless. European
unsettlement cannot be ignored. but
it is still fact that so Tar this
raar there has been very little re-
sponse In our markets to conditions
abroad, favorable or unfavoraole.5
-! Copyright, 1921