San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-04-08
CONFIDENCE IS
! EXPRESSED IN
STOCK MARKET
Recent Reaction, Like Pre-
ceding Rise, Carried
to Extreme.
REIMBURSEMENT Is ON
Trade Conditions Warrant
Some Expression on /
Exchange.
REIMBURSEMENT IS on
BY STUART p. WEST.

By STUART p. WEST.
: Copyright. by The San Antonio Light.
New York, April 1.-THE rise on the
: stock exchange from the closing hall
of January to the middle of March was
undoubtedly extravagaLt in its later
stages, even taking the most optimistic
view Of general business conditions.
On the other hand, the reaction dur
ing the last two weeks Of last month
E which wiped out, in the greater part
of the list, something like two-thirds
of the previous gain was, in its turn,
excessive.
o. What happened during the last week
Is not 50 much a fresh advance as a
readjustment between the market
movements which were carried to ex-
tremes. So large a reaction as &C.
CURED In the closing fortnight Of
March could have been justified only
on the assumption that the outside
trade recovery had been too rapid to
AdSL, tudl 49, ludJ luc pSdh u Tic up
ward movement in commodity prices
and in production had been reached
and that the tendency henceforth
would be downward.
Expansion Not Excessive.
The grounds for this opinion do not
seem well founded. Authorities from
the secretary of the treasury down
agree that the expansion in industrial
output has not been carried too far,
that it has merely kept pace with the
legitimate demand; that the element
of speculation has been small and that
there has been no overstocking. In
these respects the position is altogether
different from that of three years ago.
There are, to be sure, two danger
Gus tendencies which have appeared
. more clearly during the last month.
One is the increase in wages, which
promises to become quite general, and
i which may result in that alienation
of wage and price advances. which was
one of the principal causes leading up
I to the troubles of 1920-21. The other
is that prices, as has already hap
! pened in pig iron and in one or two
other lines in the steel trade, will 20
ahead SO fast that new buying will be
discouraged.
Increases Not Threatening.
\, These are possibilities to be borne
in mind in any long-range view of the
financial situation. But the main
point Just now is that neither the rails
! ing Of wages nor the raising of prices
. has yet gone far enough to threaten
serious consequences. Another impor-
tant consideration is whether or not
the commercial advance of the last
! eight months has involved any strain
upon the credit such as would be like
" to lead to restrictive measures like
4 those of the autumn of 1913 and the
spring of 1920.
The Federal Reserve board has stat
: ed that loans of the member banks are
up 100000 from a year ago and
are approximately as large as they
were at the maximum of 1920. But,
on the other hand, rediscounts at the
; Federal Reserve Banks are, in the case
of commercial loans, only one-fifth of
what they were at the top three years
ago, and loans secured by government
paper, which covered more particular
" financial operations, are only a
Fourth of what they were at the same
time.
Larger Gold Reserve.
In q word, the member banks have
been able to take care of the enlarged
credit requirements of the country
without making use to any important
extent of the rediscount privilege. The
Federal Reserve institutions mean
. while have 81 ,OO0, 0O0,0 900 more in gold
: than they had three years ago to meet
credit demands.
Considering this wide margin of re-
serve as contrasted with that at the
:. close of 1919, and considering that the
commodity price average is not half
way back to the high of 1920 from the
low of 1921, it cannot be said that any
degree of initiation yet exists. So far
as Wall street conditions are con-
: cerned, it is true that brokers' loans are
pretty nearly as high now as they were
at the worst of the inflationary period.
But this does not imply, as it did then,
to over-extension of pools and individ-
uals.
1t IL due, principally, as the presi-
dent of the stock exchange has pointed
: out. to the vast increase in new Sc
curity issues and in the number of
new stocks and bonds listed upon the
exchange. The total value of listed
securities in November, 1919, was
nearly $33, 500, 100000; on March 1,
/, 1923, it was over S42 ,000,00O,OO0.
+. Record Freight Tra.:-c Expected.
Possibly the most striking evidence
of what the feeling is toward the bust
ness outlook was given this week by
the report of the Association Of Rail-
way Executives setting forth their ex-
pectations of a record-breaking traffic
movement in the autumn and their
plans to meet it through the purchase
z of new equipment.
The March figures on car loadings
have surpassed all previous totals for
that month. They were only 10 per
cent under the maximum of October,
1920. 1t is easy, therefore, TO believe
! that when, on top of the present I'M
usually heavy merchandise tonnage,
the autumn crop movement begins, the
heads of the carriers will find their ex-
rpectations realized.
The point Of more immediate i'm
nprtance is, however, that. in adopt
lhg program which calls for the ex-
penditure OF over $1,000, 100000 in
addition to the $40, 000, 900 spent last