San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-03-18
Advance Theory That Rise
Has Gone Far
Enough.
MONEY RATES STIFFEN
Will Prevent Over-specula-
ton of Post-armistice
Period.
BY BYRON SELLER.

| new 1Ofk, MARCH lb.-Speculdtlot
sentiment as to the future Of thu
market in both stocks and commodi
ties is sharply divided today. Thu
chief reason for their stand given by
those who believe that the advance
has gone far enough, is that the recov'
cry from the lows of 1921 has beer
so great. To this they add the OBJ
servation that there is a distinct stiff
fleming in money rates and that the
federal reserve authorities will never
permit speculation to run away with
prices as they did in the past-armis-
tice period.
Meanwhile, the business revival
goes on in leaps and bounds. The
reports may fairly be described as
startling. Railroad traffic is at the
highest point in American history,
Carloadings not only gain week by
week, but exceed all previous records
for this time of the year. The in
crease is divided among all classes of
commodities. For a time it was pos
sible to assert that the phenomenal
traffic represented surplus accumu-
lated during the strike. That explana-
ton is no longer tenable.
Activity in Cotton.
Activity in American cotton manu-
featuring has never been equalled. If
the spinners continue to make cotton
cloth at the present rate there will
be practically no raw cotton left In
the country by July 1, next. For in
stance, there are only $4,000 unsold
bales of cotton in Memphis today.
1t has never happened before that
Memphis did not carry-Over more than
that amount on July 81.
Production of iron and steel is In
excess of war time peaks. The indus
try is now working at 90 per cent of
operation but that is equivalent to-
over 100 per cent existing during the
war. Prices of structural steel are
steadily advancing without hating
the demand. The automobile trade has
the same story to tell, activity per-
sists on larger scale than ever before
at this period Of the year.
Income Tax Increase.
Only rough estimates of income tax
returns can yet be made, but the in
dications are that they are very large
increases over 1922. And it must
be remembered that maximum surtax
rates have been reduced and that the
excess profit taxes have been wiped
10 haIsouaI ha-arar chat thu
number of individual returns filed will
be new record.
Commodities continue to rise. Cop
per, after hesitating around the Is
cent level is again strong and zinc is
selling at the highest price since the
summer of 1920. Crude oil has been
advanced in the face Of a record out
put.
And yet with all this increasing
trade activity and rising commodity
prices. the supply of money and credit
is still ample. The treasury's offer
ing of $500, 100000 in new certifi-
Gates of Indebtedness was over-sub-
scribed at least % per cent. New Sc
curity issues have met q ready mar
ket. Nervousness over the prospect
Of an advance in the rediscount rate
by the federal reserve board has
abated, although such an advance is at
least probable if the business revival
continues at its present rate.
Foreign Situation Improved.
Looking abroad, the situation is dis
tinctly improved. Reports insist on
negotiations, potential. at best, be-
tween Paris and Berlin for a settle
ment of the reparations dispute.
French securities dealt in the mar
ket have shown firmness and less is
heard about bankruptcy" of all con-
tinental Europe. Great Britain has
made n payment on her debt TO Amer
lea. Indications are not lacking Of a
reviving interest in American securi-
ties on the part of foreign investors.
How all this will affect the security
market, each must judge for himself.
All experiences show that in periods
of rising commodity prices and adj
vancing charges for money, the mar
Vet price of fixed interest rate bear
ing securities declines.
The investor demands a large re-
turn for his money both because Of ris-
ing costs of living and because he
And in as much as the coupon rate is
fixed. the only possible change is in
the price of the security.
This process is already going on
in the bond market. As for securities
which depend on their strength for
the Immediate outlook in the parti-
"ular cornoration concerned. they
move in the opposite direction from
The strictly investment issues. The
nnly dispute is between those who be-
'cve or saw they believe. that the mar
Tot has discounted the industrial
changes now taking place and those
who saw such discounting is still toI
"ome. Which party is correct only