Evening star., 1924-05-03
BY STUART p. WEST.
Special Dispatch to The Star.

Special Dispatch to The Star
NEW YORK, May 5.-Wall street
price changes during the last week
have signified uncertainty regarding
the trade outlook, but no real feeling
OF depression. Investment securities
have continued to respond to the
driving force OF falling money rates.
with the accompanying evidence of
vast sums OF idle funds seeking en-
ployment. Securities OF more specu-
lative rank have been concerned
chiefly with reports from the trade
centers. and according as these have
varied between different industries.
the different classes of stocks have
varied In their price movement.
Principal Losses Noted.
Comparing the stock exchange list
with week ago, the principal losses
have occurred in the steel and auto
mobile shares. This Is because ad-
vices regarding these two industries
have been unfavorable. On the other
hand, rail shares have been genef-
ally steady for the reason that dur
have shown ability, where they chose
to do SO, of offsetting losses In gross
revenues by reduction in expense ac-
counts. The shipping industry. hav-
ing turned the corner after four years
of very poor times, the stocks CON
cerned have been strong. So have the
copper and related shares, because.
what between the reduced surplus AZ
home and the prospects Tor econonio
Improvement abroad, the outlook Ap
pears better than IL mas IN io'e
time. .,,s
These variations between groups
are thus shown to have been quiz
logical and intelligible. Thc man
question now Is. In those lines "here
recession is still in progress, now
much the stock market decline mas
done In the way OF discounting. The
steel trade reviews have reportea
a 60 per cent decrease from lhe hish
production OF March. They nave TO
and prices still inclined to yield, all
of which means a reduced proht mar
gin and a considerable falling on IN
second-quarter earnings from the re-
suits Of the first quarter.
Eject on Consumer.
On the other hand. declining out
put must eventually have its emee. er,
have no large stocks to draw upon
and they have not made contracts FOR
months ahead the way they nao
year ago Sooner or later users or
ther price Concessions and buy for
replenishment purposes. This stage
IL is limited. may not be 80 far on.
The position OF the automobile In
dustry is harder to get at because or
the wide difference in the situations
of individual companies. Some are
retaining production well up TO the
maximum, while others have cut
down. The statement has been made
with some show OF authority that,
49, kat1 10
is off about 25 per cent from it's high
OF the year. But the feature in the
motor industry, which does not exist
in the steel trade, Is that the unsold
surplus has been piling up. In Wall
streets Judgment. the Studebaker re-
port for the first quarter. with its
heavy shrinkage In cash. increase in
inventories, and new borrowings at
the banks, showed this clearly. The
conclusion commonly drawn was that
far with its readjustment as had
steel.
Ignores Action ON Rediscounts.
There was no reason why the re-
duction in the rediscount rate of the
New York Federal Reserve Bank
should have had any effect outside
the strictly investment market.
There IL was properly interpreted as
an official expression Of opinion that
was going to last, and that hence the
outlook for securities which are VAL
ued by the money rate was favorable.
But for many months past the stock
market has not been affected by the
state of credit Where IL has gone
up, 1t has gone up for other reasons
than the question Of the money sup
ply. Where 1t has gone down, it's
decline has not been stayed by the
fact that funds were obtainable in
unlimited amounts on easy~terms.
The same may be said for outside
business. Industrial enterprises have
not been held up because there was
any fear OF credit restriction or be-