Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1923-05-07
STOCKS
! HOLD INTEREST IN
MONEY CIRCLES

New York, May Cry A. Ply
With production still holding at high
levels. interest in financial and BUSH
ness circles centered during the past
week in the rather pronounced weak.
ness shown by the chief SPECULATIVE
markets.
The average Of industrial shares
listed on the New York Stock Elk
change declined four points. :ottcn
lost nearly Q cents and wheat reacted
approximately cents. Among ,ther
commodities which show tendency
to decline were coppers. lead. rubber
and sugar. Meanwhile pub ications
Of the price induces compiled BY Dun
and Bradstreet brought out the point
that the movement was q continual
ton of the heavier tendency in prices
Which became evident during April.
Diverse explanations we're offered
for the declines and various interpre-
tatiONs were placed On their signjfi-
canoe. In some quarters it was held
that the reactions were 9 natural &C.
cbmplishment Of the slackening CT the
buying movements which have been
so strongly maintained during the
early spring. According to this view
buying seldom continues in a steady
stream but comes. rather, in waves.
One such wave admittedly was end
ed and a new one would not be eX-
pected Immediately.
Those who explain The situation in
this fashion also point out that the
season of the year is at hand in which
buying naturally would slacken.
, Another group of observer. main
tain. however. that other forces are
dt work. they point to what the! de-
scribe as an epidemic Of wage in
creases and claim that the output Of
labor is now diminishing. Production
costs. they aver. arc being inflated
either must be passed OF tC the con.
iumers or tha' profit. vii. be i'm.
paired.
In support of this view, conditions
in the cotton industry are cited.
Manufacturers are reported to have
acquired substantial stocks of cotton
at the 80 cent level; in addition. they
have since been forced to increase
wages. Jobbers and retailers mean
while are not confident Of their abil-
ity to command higher prices and
their buying has fallen off. Under
these circumstances the manufacture
ers are reducing their rate of opera
ton and are buying less cottoi. which
naturally affects the price of the
commodity. With the latter some
three or four cents below the price at
which manufacturers are carrying
their inventories. the question of pro
fits is, of course. very much to the
fore.
AS to what will happen next there
is further difference of opinion. Some
maintain that consumers will not pay
the higher prices. Such persons nat
urally take a bearish view of the
stock market. Others emphasize the
point that the wage increases Will
enlarge purchasing power and expect
consumers to make their demands
felt regardless of the higher prices.
This group also hints at tn, posi-
hility of bonus bill, with its infla-
tionary implications. after the new
congress assemblies. Such a boom
While strongly disapproved by eco
nomists and conservative bankers.
would. it is claimed have quite diff
ferent effect on the stock n arket, for
the time being at least.
AS to the stock market itself. it has
been apparent that the ~ecent reac-
lions were preciptated and forced
by active short selling by ain agrees
sive bear party. 1t is generally adj
mitted. however. that extensive liqui-
dation was induced. Stop los orders
were frequent. and longs were in
duced to let go. The market closed
with a Steadier tone, however.