The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1923-04-15
BETTER BUSINESS
IS, FORECASTED BY
WEEKS STOCK MART
Evolution From Depression to
Prosperity Appears Not
Completed.

NEW YORK, April 1.-THE re-
markable Improvement In all forms
of domestic trade and business has
been clearly foreshadowed by the
steady upward movement of Sc
curity prices on the stock ex-
change, which again establishes it's
reputation as the only infallible
forecaster of future economic devel-
opments. The present advance was
inaugurated about the middle OF
1921, when Industrial activity was
at allow. ebb, when unemployment
conditions were quite embarrassing,
and money was a drug on the mar
ket. @
Whether or not the evolution
from depression TO prosperity has
eliminated is largely a matter of
opinions, but present conditions In
trade and industry constitute the
most impressive array of favorable
factors for any time since the clos
ing of the war. We are now wit
Messing the marking up OF the
highest records for car loadings In
the history OF American transpor-
tation, record breaking consump-
ton of gasoline, continued increase
in retail and chain store business,
record breaking iren production and
finished steel manufacturing, auto
mobile production at new high rec
ord, favorable railroad earnings
with promise of enormous increases
in the equipment of American car
riers, labor fully employed at good
wages, agricultural products at
higher prices, heavy increase in
savings bank deposits, disappear
ances of strikes and major labor
troubles, and evidences of sufficient
banking resources for all legitimate
demands.
It is quite evident that there has
been no necessity whatever for the
apprehension OF higher money rates
which threw such a scare into the
big speculative district in the early
part of the month. There is no
point of similarity between present
conditions and those which pre-
vailed in 1920, when the banks were
surfeited with frozen loans, the re-
serves both of the Federal Reserve
banks and the member banks were
close to the legal limit, and only
the swift advance of the rediscount
rate and the call money rate halted
the initiation and excessive specula-
ton which was then in process.
The present advance in business as
in security prices has been attended
with extreme conservatism on all
sides, and no dangerous tendencies
have been permitted to develop.
It should be borne in mind. also. |
that Federal Reserve rediscounts
have not increased as rapidly as
member bank loans, for the reason |
that the member banks have been
in a position to extend accommoda-
ton win their own resources. In
addition to that, they have been
selling securities, an operation that
has been stimulated by the rise in
money rates and the lower relative
yield on their security holdings. 1t |
is generally felt that If the reserve |
rediscount rate is to be raised, 1t |
viii NOT be general, but only in the |
districts where the reserve ratio Is |
low. With a reserve ratio Of 81
per cent there seems little reason
to look for an advance in the rate
of the New York Reserve Bank.
After a steady decline in prices,
extending almost without Interrupt
ton since the middle of last
September, the bond market gives
evidence of gradual hardening. AS
on previous occasions, the leader
ship in the upward movement has
been taken by the Liberty bond
issues, demand for which has been
steadily increasing. The British
government, which is now prepar-
ing for its second payment on it's
war debt, has been in the market
for these bonds, as also has our
own Treasury Department and
wealthy American investors.
Buying of the better grade of
public utility, industrial and rail-
road bonds by the savings banks
and fiduciary institutions has been
sufficient to absorb most of the Of
ferings, and prices in this division
of the market have also been firm
and steady. Investment bankers
are generally of the opinion that
the slump in prices has terminated,
and that higher prices will prevail
In the future. They are advising
accumulation of the most attractive
bonds that can be secured at pre-
vailing prices and income yields, on
the assumption that no more favor
able conditions along these lines
4 &Tzs