Evening star., 1923-11-03
BY STUART p. WEST.
Special Dispatch to The Star.

NEW YORK, November 3.-At the
high points reached toward the end
of the week large section of the
stock, market had regained all and
somewhat more than the ground lost
in the two preceding months. In
FULLY three-quarters of the railway
list and in more than half Of the In
dustrials prices were back to where
they stood entering the last week of
August. AS this August price level
meant a considerable recovery from
July and the latter half Of June, the
comparison Is very significant. 1t
bears out all that has been said about
the MISREPRESENTATION and the exag-
geration in the price movement of
the last five months.
Wall street made the mistake of
thinking that the unfavorable condi-
tlons In certain lines of industry por-
tended a general depression. 1t fas-
tened Its attention upon the over
production in oil, in automobile tires,
IN copper, In leather products, at the
same time magnifying the cases
where high labor costs were eating
INTO prohts. 1t regarded these aspects
as the only ones worth considering in
the general outlook.
Action mt Psychological Moment.
The declaration of the extra divi-
dend on United States Steel COM
mon stock, accompanying a surpris-
lngly favorable statement of third
quarter earnings. is given credit for
the extraordinary turnabout. This is
true, but 1t Is also a fact that the
market for month previous had
been viewing the business situation
1 O AIx
cr1minate between stocks represent
ing lines of trade that were doing
poorly and those representing other
lines where the volume Of sales was
large and the profit margin salts
factory.
The action Of the steel directors
came at the psychological moment
when the speculative community had
begun to realize after long expert
menting that the better class of
a result in many of these stocks all
the loss of five months of widespread
pessimism. persistent selling pressure
and apparent indifference on the part
| of buyers. has been retraced. That it
should hove taken only a few days
to bring about this recovery gives
some idea OF the artif1cialty of much
| of the recent selling movement.
Business Healthy without Boom.
| disappointment is still expressed
| In some quarters because fall trade
has failed to pick up as much as
expected: But the people who dwell
upon this are continually thinking
of the conditions of last spring and
setting them up as basis of
comparison. The facts are that the
let-down from the feverish expan-
sion OF eight months ago is altogeth-
er healthy and desirable. Certain
| industries which based their predic-
tion. at that time on the theory that
the country was in for a boom, are
| paying the penalty. But the main
volume of business as represented
by the merchandising trade. is doing
! Well. We see the evidence OF this
| in the record-breaking carloadings
and in the very heavy sales of the
! mail order companies. the chain
| stores and other concerns engaged
in the distribution of goods.
| Conditions Should Continue.
! There is no reason why these fa-
! vorable conditions should not con-
tinue Labor is fully employed at
high wages. This makes for a big
| buying power at the industrial CEN
ters. The advance in farm prices
| has done much the same thing for
the agriculturists. There is no long
er complaint that agriculture Is in
| section in the wheat country of the
/ northwest has had to learn an ex-
pensive lesson, that 1t is unwise
to put all its trust in single crop.
| But elsewhere the farmers are MAX
| ing money and, as compared with a
| year ago, are getting more in ex-
| change for other goods. In a word,
| their buying power, too. has in
! creased.
No Large Upward Swing Likely.
| On the other hand, there is no war
! rant to expect more than a continu-
ance of normally good times in the
majority of business lines. Any great
expansion is not to be expected. hence
beyond making the adjustments re-
Quired by the excesses on the down
side, there is no logical ground for
any large further upward swing on
the stock exchange. The investment
outlook is propitious, with money
! rates already easing and the time
drawing near when funds needed for
| the crop moving will be flowing back
! to the banking centers. This should
mean an upward tendency for bonds
| and other investment securities.
! Foreign Exchanges Very Erratic.
The foreign exchanges have been
affected by the proposal for a Euro
| pean economic conference, going up
when it seemed likely that some good
would come of it, falling back when
the prospects of success were made to
look dubious. But the foreign ex-
change market has become one of the
! most highly speculative of all, and its
during the last week or so, reflect the
| speculative sentiment of the moment