Evening star., 1923-10-28
j. s. BONDS Strong
DURING PAST week
High-Grade Rails and Indus.
trials Also Display I'M
proved Tone.
TRADE OUTLOOK PUZZLlNG
Price Trend Also Uncertain in Uu.
settled Security Markets-Big-
gest News From Abroad.
TRADE OUTLOOK PULLING
BY GEORGE T. HUGHES.
scial Dispatch to The Star.

BY GEORGE Il. HUGHES.
Special Dispatch to The Star.
NEW YORK, October 27.--Moving
without uniformity. the security
markets of the week have thrown
little light upon either the future of
trade orsef prices.
Investment bonds OF the first grade.
about the quality of which there
could be no possible doubt. have been
strong. This is notably the case with
United States government loans. OF
course, here there are special reasons
. for the strength, notably the support
of purchases for the treasury sinking
fund and possibly for the account or
the British government as we'll. the
latter being connected with the next
payment of interest on the interna-
1ional debt of Great Britain to the
United States Under the funding
agreement liberty bonds are taken al
par for, the purpose Of these interest
remittances. These reasons aside
however. it is fair to assume that
liberty bonds have been sharing the
Improvement displayed by the high
grade rails and industrials. All this
is In accord with precedent that when
money is easy and there is uncer-
tainty about business if only in the
minds of the timid.
Many violent Declines.
ON the other hand there have been
sharp breaks in certain speculative
securities, both stocks and bonds.
where there has been doubt about
either the particular corporation in
VOWED or about the industry in which
1t is chiefly engaged. Instances are
the oil, copper, rubber and leather
trades. The oil situation is well
known. Production continues to ex-
ceed consumption. There has been
great depression in the market for
copper. Wall street sentiment as to
the rubber and tire outlook is still
peSSimiSjc:, Finally, one of the larS-
est leather manufacturing companies
made a very disappointing report this
week. Prices for the shares Of the
corporations engaged in these and
kindred lines of activity suffered ac-
cordingly.-s
OF equal interest was the sudden
and violent decline in both bonds
and stocks of one or two cailrnads
with marked heaviness. in Others. n
no case were there any new facts
about the carriers involved nor was
the general railroad situation any
worse. In fact, If anything. 1t Is bet
ter and even the road, the securities
of which sustained the greatest loss.
responding period of year ago.
Some Resistance Noted.
1t is. of course, a matter of personal
opinion just when railroad shares will
have discounted the unfavorable fea-
lures of the situation. The st. Pau,
has shown marked recovery in earn :
ing power this year. 1t still has to
face large refunding operation some
TWO years hence. The Northern Pa
ciac and the Great Northern. earnings
of which have fallen off, have no neal
maturities to meet. ii And IL is not to
lie expected that agricultural depres-
sion there will continue indefinitely.
Undoubtedly also eventually there
will be traffic enough for all three.
1t would give a false impression to
security markets without pointing
out the remarkable resistance to sell
ing pressure shown elsewhere in the
list. Steel. equipment, automobile
and utility shares have been only
moro remarkable in the case of mo-
tor stocks than anywhere else. in
view of the exaggerated pessimism
with which professtonal Wall street
Processes to view the imrn ediate fu-
ture of the automobile industry.
Notwithstanding all the talk about
overproduction, intense competition
and the approach of the so-called
saturation point. automobile stocks
anced the risk with the return on
the investment The automobile
business has confounded the prophets
so often that it takes more than the
ordinary assurance to set a limit to
its expansion.
Foreign News Most Vital.
The most important development
OF the week was the publication of
the correspondence between the gov
ernment Of the United States and
Great Britain relative to the Euro
pean situation as a whole and to the
reparations problem in particular
Taken as an indica tion of willing
ness on the part of the administra :
tion at Washington to extend a help
ing hard, it was highly encouragfnp e.
There can be no disputing the prop
osition that our own industrial and
ecor omic fabric is closely interviewer
with European affairs. And yet the
markets, with the exception of the
tion to the news 1t may be that this
apparent indifference is due to the
difficulty of fOreseeing just what will
be the next step. 1t Is more prob
able that the buyers and sellers whose
operations control our markets have
SO long been absorbed in considera-
tion of domestic trade and industry
that it has become a habit to ignore
affairs abroad. s..
Prices Versus Consumption.
For the present attention Is con-
centrated upon conditions at home
and most important of these is the
attitude of the ultimate consumer
Perhaps this is best illustrated in the
matter of cotton and cotton goods
The supply is admittedly short. the
price of the raw material is at Its
high point but the manufacturing
consumer is not going ahead any
faster than he feels reasonably sure
the retail trade will allow. In a
sense it may be regarded as a test
case. -r.
How far can prices be raised with
out checking consumption2 The an
swer is not yet plain, and until it is
the business interests involved are
taking no chances they can avoid
All of which is reassuring rather than
otherwise.
Copyright, 1921