Evening star., 1923-01-21
WEEKS MARKETS
STAND Up WELL
Some Solution of European
.TangIe Believed Near by
Many Large Investors.
HOME OUTLOOK BRIGHT
Foreign Situation Must Turn for
Better or Worse Soon, Finan-
ciers Declare.
HOME OUTLOOK BRIGHT
BY BYRON SELLER.

Special Dispatch to The Star.
NEW YORK, January 20.-JroGress
toward re-establishing political and
commercial stability in continental
Europe, if any has been made during
the week, does not appear on the
surface. The French have frightened
their grip on the great German iron
and steel valley of the Ruhr. The
Germans continue their policy OF
passive resistance. Deprived of the
great bulk of their coal supply, II
is ii question how long German IN
dustry can escape disintegration.
How all this viii help France is not
plain. The British and Italian gov
ernments remain anxious watchers OF
the portentous struggle. And the
reparations problem. on which the
future of all Europe depends, Is as
far from settled as ever.
But, Notwithstanding all these
darkening clouds, the markets OF the
world are undisturbed except mo-
nentarily or in some particular Sc
curity or commodity. 1t is at once
one of the most surprising and inter-
eSting situations in financial history.
1t is true that the unfortunate Ger
man mark has discovered new pos
sibilities in depreciation of quoted
price, but no one now expects any
thing else of mark exchange
Sterling Exchange Firm.
Franc exchange and French bonds
have weakened under the progress OF
events but the wonder is that the
decline has been so small. Sterling
exchange holds like the famous rock,
which in British hands guards the
entrance to the Mediterranean. The
London money market, which might
be expected to be disturbed were half
the catastrophes to happen which are
discussed in the foreign dispatches.
shows no concern.
At home stocks go up easier than
they go down. Bonds and high grade
investment securities generally are
heavy, but there has been a mar
velous absorption of new offerings.
Various explanations are advanced
to account for this paradox. The most
commonly accepted is that hnanciaI
markets are forecast and discount
ing some settlement of the whole
European tangle. Certain IL is that
there is obstinate faith that solu-
ton will be found. And this faith eX-
presses itself in support of the securi-
ties markets.
Early Turn Predicted.
French DOnuS mace new lows tllIS
week, but at its close it was still
possible to say that even French
bonds were easier to sell than to buy.
1t may be. of course, that the markets
are all wrong and that the disasters
which seem To impend VIII really oc-
cur. but markets have uncanny
faculty of being right in matters like
these. The only thing to do is to wait
and sec. The waiting ought not to be
long. for the present deadlock cannot
go on indefinitely.
1t is to be observed that there are
several possibilities in connection
with the French invasion of Germany
which are of interest to American
trade; one of these concerns the cop
per industry. If all the German pur-
chases of copper the to be cut off the
effect on the reviving copper market
will not be small. If the iron and
steel production of industrial Ger
many. on the other hand. is to be
throttled. whether directly by French
occupation or indirectly by cutting
off the coal supply of the rest of Ger
many, the iron and steel trade of
other countries must be stimulated
accordingly.
Gold Another Factor.
There is always another factor than
the European situation to be. taken
into account when considering the
apparent strength of the securities
market. That is the money situation.
Our gold reserves continue to pile up.
Notwithstanding the efforts to force
more gold into circulation. The re-
serve ratio for the combined federal
reserve system was practically the
same this week as it was in the cor
responding week of 1922. The differ
ence is only one-tenth of 1 per cent.
How far this factor is effective is ad-
mittedly matter of opinion. but it
cannot be overlooked in any thorough
analysis of the situation.
AS far as the trade situation is con-
cerned there is little change. Per
hapS the most noteworthy thing is
the effect of rising costs of produc-
ton on forward. contracts. Even
tually rising costs at wholesale must
he translated into rising prices at
sumner will be willing to go is very
doubtful. But no one seems par
ticularly disturbed about this just
now.
Auto Makers Unafraid.
At any rate. the automobile manu-
facturers are not worried. They go
on preparing for the biggest year in
pie seem to think that the rapidly
mounting expenditures for motor cars
are a dangerous sign of national eX-
travagance. These doubters might
be reassured by study of the savings
banks statistics. which show an in
crease in deposits for the year 1922,
as compared with 1921. Of about 81
500, 100000. During the same time
building and loan associations in
creased II per. cent in members and
Is per cent in resources. Not all
Americans waste their substance.
From a strictly investment point of
view, the facility with which the
great Anaconda financing. the largest
industrial operation of it's kind on
record, was accomplished was the
outstanding event of the week. 1t is
all the more noteworthy because of
Tho doubts so freely expressed as to
the detrimental effect on the supply
of capital for industrial purposes that
might be brought about by the turn
ing to tax-exempt securities of ia
vestors of large wealth. The income
tax returns certainly show that more
and municipal bonds to avoid the
heavy sur taxes. = Yet this drain
does not show on the total amount