San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-08-19
Confidence Replaces Worry
Over Political
Problems.
OIL SHARES DECLINE
Drop, However, Has Little
Effect on Remainder
of List.
BY BYRON SELLER

by BYRON SELLER
Copyright, by the San Antonio Light.
New York, Aug. 1S.-The security
markets, both speculative and invest
ment, have shown a better tone this
week. There is more confidence in
the industrial list and less worry
| about political problems.
Moreover, there has been remark
able resistance to unfavorabie news.
The best example of this is seen in
the oil trade. While oil securities
sold off following the price cuts SO
! widely advertised, there was very little
effect upon the rest of the market.
Then too, the alarm over the foreign
situation and the drastic drop in
French and Belgian francs has abated
for the moment. How long this i'm
provement will continue nobody can
say. Speculative sentiment is no.
toriously unstable. 1t does look, how
ever, as if some new obstacles will
have to be raised before the pessimism
which has ruled for the past few
months resumes the sway now broken.
Automobile Shares Attractive.
In its way the Investment situation
is fully as significant as the specula-
tive. The week has been marked by
remarkable revival of interest in
high grade securities. In some ways
! this was an unexpected development.
Stocks and bonds of second grade or
of semi-speculative status have been
selling to return very attractive yields,
risk considered.
For instance, stocks of sound pub
lie utilities listed on the New York
stock exchange have been quoted n
the basis to give the investors at cur
rent levels anywhere from to 10
per cent. Shares in automobile COM
panies seemed to be similarly attrac-
in the automobile business is
tive, although the slack season
just about beginning and there are
always those who foresee a near ap-
ration point. Junior bonds of rail-
roads, non-dividend payers, such as
the Erie, but whose earnings are max
ing steady progress II the right d.
rection, have also been selling at very
low figures.
Look for Improved Fall Market.
1t was natural to expect that this
grade of stocks and bonds would re-
spond promptly to the more hopeful
feeling. But the really important
change has been in the attitude of
investors both private and institution
al toward securities of the very high
est grade, those about which there is
never any doubt as to quality, no mat
ter what the business outlook may
be.
Last week there was some evidence
of foreign buying in American first
mortgage railroad bonds, such as le-
gal investments for savings banks in
New York state. This week this de-
mand has widened to include in
quiries from domestic investors. The
result is, dealers in this group are
greatly encouraged. For the first
time in months they have ventured to
anticipate an improving bond market
in the fall.
How much Of this improvement is
due to restored confidence and how
much to an accumulation Of funds
seeking investment is a matter of
opinion. Probably both causes have
been influential. 1t is the normal
order following n lonf period Of
depression. for high grade bonds to
show the first sign of returning con-
fidence. But the present situation
is quite different. There has been no
depression in business. There may
have been some reaction from the high
level of the spring, but that it has
been a serious reaction is not gen.
orally believed.
What has happened il this: The
three or four months decline in stocks
and Q vivid recollection Of the ex-
periences of 1921 have made investors
so timid that they are willing even
now to take no chances.
Foreign Situation Disturbing.
The situation abroad is still re-
plete with disturbing possibilities. The
uncertainties show themselves more
plainly in the market for foreign
bonds. but it has its influence on
domestic securities as well. In a
vague way the investor fears the. re-
l uptii -OMh piVSptiits chNu"a
any general upset occur in Europe.
1t is n question, however. how much
this admittedly unfavorable factor has
been discounted. At any rate it is
not looked upon with quite so much
concern just now. And the two other
conditions that weakened confidence,
the low price Of wheat and the prob
ability of political attack upon the
railroads in the new Congress are not
so alarming.
For one thing the wheat market
shows signs of recovery and the poll
ticians are not so vociferous as "a
their intentions. The new Farmer
, Labor senator from Minnesota says
! while he is going to fight for the
interests of his agricultural con
! stituents at Washington, he intends
. no injury TO business. Meanwhile
there is practically no unemployment
retail trade is good and credit j.
abundant.
Transportation Problem.
! There is one condition which NJ
) investor can guard against by at
: tention TO general business or to the
financial situation. That is tn,
chonooc hrouOht ahouf hv the proCraS.