San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-08-05
BOND MARKET
HESTTATES
DURING WEEK
Death of President Hard
ing Brings Trading 10
Standstill.
FOREIGN ISSUES FIRM
Crisis Abroad Does Not
Affect European
Securities.
FOREIGN ISSUES FIRM
BY BYRON SELLER.

ident Harding's death, the security
markets of the week had moved with
no more pronounced characteristic
than hesitation.
While the news of the nations loss
was received everywhere with the most
sincere expressions of sorrow, conf
dence was manifested in the character
and ability of the new President to fill
the new position to which he was so
unexpectedly called, and the underly.
ing conditions which govern both in
vestpent and speculation were regard
ed as remaining substantially un-
changed.
Attention this week has been divided
between the foreign and the domestic
situation. Both were regarded as
holding certain disturbing possibilities.
But it was the condition abroad upon
which the greater stress was laid. 1t
is, of course, hard to say just what
influences investors, actual and poten-
tial.
Buying Power Absent.
1t is plain, hC E. ever, that it els abb
sence of buying rather than real liqui-
dation which has been mainly respon-
sible for the recent decline in securi-
ties. There is always a greater or
less amount of selling for 'short" ac-
count, but unless this induces real
holders to dispose of their holdings it
has no permanent effect. A decline
will extend to the point where support
is attracted either from the specula-
tive or the investment interest.
In the present mood the speculative
group is mostly working toward lower
prices while the investor stands aside.
1t becomes important then to analyze
if possible the reasons for this invest
ment lethargy. just now foreign af-
fairs are doubtless the cause of much
of this distrust. In vague way it is
expected that a break between France
and Great Britain and the collapse"
of Germany about which so much is
said will react unfavorably in the ex-
IRENE upon our own industrial posi-
ton. No one explains exactly how
this is to come about but the nsycho-
logical effect is all the greater because
the process is so obscure.
No Market for Wheat.
So much has been made of the mis-
fortune of the wheat farmer and the
lack of q world market for his product,
which lack, in part at least, is alleged
to be due to Europe's inability to buy,
that not until the situation abroad
takes a positive turn one way or the
other will this feeling Of doubt be re-
moved. The chances are that even
were the worst forebodings to be real
lied, the effect would be only little
more disconcerting than the present
uncertainty.
Foreign Bonds Not Affected.
And yet it must be admitted that
this uneasiness about European dis
turbances shows very little in the place
where it might be expected to show the
most, the foreign bond market. Ii
has been one of the most striking phe-
nomena of the week that the very great
weakness in French and Belgian eX-
change has bad no counterpart in
French and Belgian bonds. These
bonds are selling considerably above
the lows of the year, made last jan
uary and February. The explanation
seems to be that the holders have be-
come hardened to the recurring report
of the crisis abroad and refuse TO be-
come pessimistic language.
While concern over the European
problems has q deterring effect upon
prosperity at home seems to have no
stimulating effect. Three great indus
trial corporations have just made re-
ports showing the full years dividends
at present rates earned in the first six
month sof 1923 and their stock con-
tinues to sell around the recently es-
tablished low points.
In the case of U. s. Steel this con.
dition might be explained by the small
return a present investment IN the
stock gives, but that does not suffice
in the case of Studebaker or American
Locomotive. 1t may be urged that the
market is discounting greatly reduced
earnings in the second half of the yeai
and probably there is something TO be
said on this score. This, however
hardly accounts for the returns to be
had from the shares of the public utili'
ties. the business of which is fairly un
form through good times and depres
sion alike. Probably just as in the
matter of the foreign situation so witt
things at home it is the fact that there
are so many unknown factors thai
keep the investor out of a market
which would ordinarily look so attrac
tive.
High-grade Bonds Steady.
1t is not only merchants and specu
lators who have vivid recollections o
the great deflation of 1920 and 1921
Investors remember it well also ant
until they are able to get a clearel
view of the future they do not pro
pose to take any chances. The educat
ing effect of the price slump two year
ago can hardly be over emphasized
In one particular the situation is dis
tinctly encouraging.
Through all the decline in stocks
both speculative and investment, tn
higher grade bonds have remaine'
steady. The market has been dull ant
there has been little new buying, bu
on the other hand prices have not gon
down. Even should all the uncertain
ties, domestic and foreign. operate {
prevent any great recovery in stocks
the outlook for the better bonds
generally thought to be good.