Evening star. [volume] (Washington, D.C.) 1854-1972, 1924-02-16
by STUART r. WEST.

Special Dispatch to The Star.
NEW YORK, February 16.-This
weeks severe fall in stocks may be
set down as n purely speculative
movement. 1t has not drawn with 1t
investment securities. On the con-
trary, both investment bonds and In
vestment stocks have held up well.
But. rs a speculative movement.
the decline on the stock exchange has
followed logically what went before.
On the facts of the outside business
situation, Wall street had a right to
be optimistic, but had no right to
be as enthusiastic as it was up to
fortnight ago. Stocks were up all
the way from Is to 20 points from
the last week in October and yet
many commentators, including some
in high places, were talking as II this
were only the beginning OF great
upward swing.
Public Cautious I'm Trading.
The same thing occurred a year ago
and the sequel was the extravasant
pessimism of the summer ana the
early autumn. Wall street Is noted
for going to extremes, but 1t has
never swung around to such absurd
lengths as it has during the last Few
years More and more the conciusloh
ie horne in on one that the STOCK
market is no longer the reliable pa,
rometer of outside conditions IL uSeo
to be considered. ~.
Fortunately the market mas not .ns
extended speculative account 1t had
n wear ago. The public has not come
in as in February and March, 1873.
In outside business there mas pes is; ~
excited rush to buy with raploll!
mounting prices. Consequently MY ,b bn
position cannot be compared Win ~
of last year.
oil Icnsc Scandal Used as Prefext.
The plain reading of the Wall street
situation is that the improvement
which has occurred in general trade
from last fall to the present time
was discounted by the very large rise
in stocks. An adjustment had TO Iol.
low and It has come within the last
two weeks The attempt to drag IN
the oil lease scandal as major
cause is far-fetched. When wan
street wants u pretext Tor nuctu"
ton which would have come about
anyway. it seldom has difffcuity IN
finding one. In this instance the sen,
ate Investigations lay ready 10 haha
to provide the desired excuse. NO
sensible person ought to believe That
the proceedings at Washington VIII
result in uncovering such corruption
in government as will weaken faith
in the future of American security
values
Oyersubxeription of Loan Impressive
The success of the Japanese loan OF
100000 900 has been Il striking IN
cident of the week and the oversub-
scription impressive. The attractive
moss of the yield. which is over per
cent. has been one factor. Another
has been the large application Of
American corporations seeking TO DO
more business with Japan. IN
doubtedly the subscription TO this
loan has represented much larger
percentage of bona fide-that is, in
vestment-bids than has been the
case in almost any other important
cffering of the lats two years.
The japanese transaction in its
broader asnects is a distinctly good
thing. 1t adds to our financial
prestige that so large an issue OF
Heated here. 1t will be very helpful
TO our trade with Japan. and hence
70 our foreign trade In general. IL
will contribute to forever down tne
bugaboo of an American Jspanese
clash. which so often cropped up In
the markets of a decade or 50 ago.
Financing by Railroads.
Put +bere is n narrower point of
view of more immediate interest TO
the investment community. Here is
another addition to the already large
outpourirfgs of new securities. "a.
~ sap,a time come intimations that
the railroads are about to bring out
an extensive program of new financ.
ing. The investment market foresees
in all this an active competition WIZ.
existing issues. and the diversion OF
funds into new lines which would
otherwise have gone into the aceus
toned channels. The same sort OF
thing checked the rise in the bona
market in September 1922. and again
constituted a depressing influence
both for bonds and stocks IN inc
spring Of 1928.
Supplv md Demand at Work in Cotton.
The drop in cotton has been quite
,s Striking as that in stocks. Prices
have lost all the ground gained slhce
~1rrN tn NuAMGE MHME