Evening star., 1923-12-31
Ercessiue Caution Shol Bond 71udng OookC CT
WALL STREETS OUTLOOK FOR YEAR
DECLARED TO BE HIGHLY FAVORABLE
Election Effect, One Aspect Difficult to Analyze;
Market Gauge to Business Condi=
tons During 1923.

purchasing capacity of the farm
population would fall off and SO have
a depressing effect upon, general
trade. The testimony to the con-
trary lies in the unsurpassed earn
ings of such enterprises as the mail
order companies. whose main busi-
ness is in the farming states, and in
the extraordinary volume of railway
traffic during the autumn and early
winter.
Farmer Reasoned Falsely.
The Improbable conditions in the
wheat trade are purely an episode by
themselves. They must be dealt with
first of all through clearer under
standing of the causes which brought
them about. For a long time the
BILE lay in Europe's inability to buy
for her normal needs. In reality, il
this has been a factor at all. it has
been only minor one. The essen
tial points were, first, that in view
of the largely increased production
farmer planted altogether too much
wheat in the fall of 1922 and the
spring of 1923. and. second. that on
account of the disparity in wage
no longer compete in the foreign
market and make money. The cor
receives lie in diversion of wheat
territory to other crops. adoption of
the idea of producing for the home
demand alone and some form of CO.
operating marketing. Preliminary
figures for winter wheat indicate that
rail- planting was cut down between
IL and Is per cent 1t remains to
be seen whether the spring wheat
farmer will follow this example.
Turning to European affairs, the
general outlook certainly has not
been improved, but, on the whole, has
grown more. dubious than it appeared
this is afforded by the course of the
exchanges. The pound sterling is
selling, roughly. 30 cents in the
pound under what it was at the start
OF last January. Partly this has been
due to the swing in the trade balance
more and more against Great Britain
IN the latter half of the year. Partly
1t has been the result of large par
Ghases as of American securities by
more of thsfr fpas ,n to have
which interest and principal are pay
able in dollars. British political un-
terta1nties and the unrest growing
out of the unemployment problems
nave been complicating factors.
= Franc at Record Low.
The French franc has come down
from nigh of 9.37 cents in the spring
OF 5sZ2, and 7.42 at the beginning of
1923. to where it has been quoted at
a record low below cents This de-
cline has occurred despite a steady
Improvement in the French foreign
trade and increased activity in in
dustry at home. In 1929 French ex-
portS rose Al per cent and imports 81
per cent over 1922 The import excess
was. brought down to 1,433. .O0O. 900
francs during the eleven months ended
November 30. This sum, it is calcu-
lated, was covered by what was paid i'm
by foreign tourists, so that France is
NOT running any more into debt in it's
routlne outside operations. If a
nations credit were determined by the
state of its foreign commerce and
domestic industry alone, there would
nave been no reason for the fall in the
franc: But still more important
consideration is the condition of the
national debt, whether it is likely to
grow or diminish, and whether or not
the ability to redeem this debt is be-
coming less or more sure.
Explanation for the downward move
ment in the franc is that without Ger
man reparatlonS, France cannot pos
S1biy hope to balance IFS extraordinary
budget, and that the chances of ever
collecting. sufficient sum from Ger
many have steadily dwindled with the
course OF the year. The total debt
before the war was 100000 600
1t stands at some 430.O00 ono ooo
now. When it comes to financinp The
budget requirements next spring the
French investment community will he
asked TO take, on top of this tre-
mendous load, another 10000. 600. 600
or more. What will the response he
especially as the great decline in the
purchasing power of the paper cur
rency has quadrupled the cost of
living since 1914.
Upon the answer to this question a
great deal depends. The moment the
french peasant gets tired of putting
up money for these loans and
aWakens to the truth about the un-
certainty of reparations, will be a bad
moment for France. 1t will mean in
crease in the already heavy burden of
taxation, and if this is not Sufficient.
as undoubtedly will be the case. If
Will mean resort to the desperate
expedtent of paper note imitation.
AS the German financial position ap-
pears at the year end, the experiment.
with the new renten mark currency
will fail because no amount Of
abridging the paper money unit will
avail while terrific budget deficit
remains. Much is hoped for from the
two Investigating commissions which
will go intb Germany the middle of
January. But sooner or later the So
luton of Germany's financial problem
would seem to be along the lines
which has worked successfully in
Austria, namely. the use of interna-
tional credit to stabilize the monetary
system on condition of interna tional
control of the German budget
Copyright, 1921