Evening star., 1923-12-31
YEARS MARKETS MARKED
BY SHARP VARIATIONS
General and Nearly Inexplicable Decline Sets In
Between Two Periods of Moderate
Advancement

general state of trade. 1t was and Is
outside It's own trade. IT is unneces-
sary to take up in detail the fiuctu-
at1ons in other commodities. The i'm
portant point is that all through the
year retail consumption has been
heavy and manufacturers and whole
salers have operated with the utmost
caution, taking no chances on inflated
inventories.
Lesson of 1921.
The truth of the matter is that neither
business men nor spectators have for
gotten the lesson of 1921 Even if they
had been inclined so to do the econom-
lists, professional and amateur, would
not permit it. Probably never in the his
tory of business have there been so
many analyses of commercial and finan-
clal conditions for the enlightenment, il
not bewilderment, of the average bust
ness man.
From the Federal Reserve Bank and
the statistical service of one of the
largest universities down, to a score or
more of professionals who give their
opinion for fee, there has rained a
HOOD OF advice, most of il based on the
so-called cycle theory. Ali the indicia
OF business and financial conditions were
coilated in the greatest profusion with
was not surprising that the result was
to Slow down both trade and specula-
tion. Now some of these services are
very valuable, and properly used may
render a real service. 1t is folly, how
ever, to believe there is anything exact
or anything approaching exactness in
these forecasts. If there were any in
fallible signs of approaching prosperity
or depression, and these signs were uni
VersalIy so Interpreted, the result would
be to dissipate the prosperity before il
arrived and to modify the depression in
advance.
Situation Abroad.
Even more remarkable than the
attention paid to the factors already
mentioned has been the lack of at
tention accorded to the situation
abroad. Only in the market for for
changes has there been any impor-
tant reflection of the chaotic condi-
tions in Europe. The American Sc
curtty markets have moved with an
eye single to domestic affairs. 1t is
not easy to explain this attitude.
In part it has represented the con
y1ction that for the present, at least,
business here would run along about
as usual no matter what was happen
ing abroad. In one respect the un-
settlement on the other side actually
proved a stimulus to high grade in
vestment securities.
One of the most conspicuous fea-
lures of the years trading in bonds
was the demand from abroad, prin
cipally from Holland, for railroad
mortgages the quality of which could
not be questioned. A good deal OF
this buying is believed to have been
for German account.
1t seemed as'if German capital, ter
roriZed by the collapse of the mark
and timorouS even of the stability of
the pound sterling. was taking refuge
in obligations payable in dollars. and
that return on the investment was of
no Importance compared with the In
tense desire for absolute safety. Re
peatedly during the year there would
be an influx of buying orders of this
kind, which kept the highgrade
savings bank railroad bonds selling
on a Az to AZ per cent basis. Ger
tainly there was no excuse in the
money market for the prices at which
these bonds sold. Securities of
slightly lower grade are also believed
to have been accumulated by British
investors, although statistics on these
matters are totally lacking. The
movement, however, was SO pro
nounced that the Secretary or Com
merce regards it as explaining the
continued excess OF gold imports.
Foreign Bond Market.
Naturally enough. the markets for
foreign bo..t-, oayable in dollars have
responded szs',ce 2.-.-ctly to changes IN
political conditions on the other SIDE.
The sharpest break in these secur-
February, when the French nrst IN
vaded the Ruhr-
French bonds declined to the low
est price on record and the midi -Eu-
ropean issues went down in sym
pathy. The subsequent rally carried
quotations up to the high of the year
in April. but in the late fall when
it appeared that there was danger
of break between France end
Great Britain came a second drop, but
not nearly as severe as in the hrst
instance.
AS the year closes market prices
for these foreign obligations seem
fairly stabilized. American invest
ments in foreign securities nave
fallen off spectacularly in 1928.
According to the Department or
Commerce, in 1922 this country took
foreign securities amounting to $963,-
000. O0e. while the estimated total for
1929, the official figures not being
available at this writing, is only
It is not open to debate that the
American investing public has little
confidence in foreign securities.
Copyright, 1929