The Birmingham age-herald., 1923-07-07
VACATION PERIOD BEGINS IN MARKET; BUSINESS DECL |NE
Public Is Scared Off By Strange Twists Taken
 By Prices
By WALTER E. BROWN tEditOr New York Comm erciaI.) lLensed Wire to The Age-HernId.) ]


 NEW YORK, July 6.-Independence Day in the middle of the week not only made 1t a holiday week but ushered in the vacation period with the usual effect of reducing the vol ume of business and the professional interest in operations.
 The public has been out of the stock market for some time, which Is really what Is the matter with 1t. Confidence has become so impaired that the public is afraid to trade in a market that refuses to follow any logical course, based upon known facts. There Is, therefore, the inn pression that there Is something hid- den. some great notivating force not discernible to the ordinary citizen. It may be economic or 1t may be political. but whatever 1t Is, the av- craze man believes 1t to be some thing mysterious, some complex un- dercurrents likely to burst forth at any time with overwhelming force. One of the curious manifestations of ths times Is the effort on the part of professional market advisors to rec onoile cause and effect. There Is no doubt about the effects, but there seems to be no agreement whatever as to the cause. There are vague ref erences to a condition that Is an aft ermath of the tar upheaval, but no very definite idea as to how 1t is to be applied.
 o 0 c
 Hunt Out Causes.
 There should be no mystery about 1t whatever. It should be possible to hunt out the causes, but there are so many of them that they are not all accounted for. The principal one is the expectation that increased operating costs due to increases In labor and materials will wipe out profits.
 There have been increases in wages. some of them voluntary. and others to avert strikes, but 1t is fairly safe assumption that they would not have been granted If 1t had not been profitable to do SO, There Is c probability also that the public ia experiencing nervous re- action from the coal and railway strikes of last year. There are rumb- ances but they are not by any means certainttes. On the contrary there is e strong chance of their being averted. Such strikes as these are local in character and there Is no widespread labor disturbance at this moment. Labor unrest. therefore. IS chiefly in the discussion stage and can hardly be held accountable for such a drastic reaction as the stock market has undergone. The hnal test will be whether selling prices will be able to absorb these extra costs. If not and buyers refuse the merchandise, then 1t will be ef~e for the stock market to become con- cerned about 1t.
 Fear Buyer. strike.
 The greatest shadow hanging over the market has been the buyers strike. It has been talked about more than anything else for the past seV- eral months. It was operated more than any one factor to Impair con fidence, but where Is It? That which occurred in the building industry was merely a determination not to under take any moro major operations until the labor and materials were that time Is not yet. The building trades are still fully employed, and at higher wages, and there have been no noteworthy decreases in the prices of materials. The only other dem onstration was in regard to sugar, engineered largely for political effect and which has already been forgot ten.
 Shelves Are Empty.
 Some of the textile mills have closed down for the time being but not because of over production. Merchants shelves are empty and the goods have not yet been produced in sufficient quantity to replenish them. The stoppage is due to the advance in labor and materials in this in stance, principally the latter. and wholesalers are uncertain as to whether the consuming public will stand for the higher retail price that must be secured. No one wants to go through another experience of get ting caught with large inventories and so they are playing safe and waiting until the demand develops instead of trying to anticipate 1t. All they can see is that they got caught three years ago and they do not propose to duplicate that experience if there Is any way to prevent it. They overlook the causes that led to it, namely, that the buying power gave out. The buying power now exists, and In any event the advances will not be prohibitive. The proba- bility is that there will be rush to buy textiles as there was last fall. There Is no buyers strike and there is not likely to be one, cer- tainly not as long 8 labor Is fully employed as 1t Is now.