Evening star., 1924-12-20
Many Stocks Far Abope Point
Justified by Their Earnings
Market Momentum, Carrying Shares Up.
,Uard Regardless of Merits and
Dividend YieIds-The Outlook.

holders of stocks have been reluctant
to sell, despite tbs rapid rise, simply
because they can see nothing else
to put their money into. In the
third place, there Is no question of
credit difficulties like there was i've
years ago. FourthIy. there Is greater
assurance of political stability than
there has been at any time in years.
Finally, there is the astonishing
change in the agricultural situation,
with the highest prices since 1920,
and with the promise Of a larger
buying power to operate upon the
industrial markets than anything
seen since the war.
Prosperity Well Discounted.
But despite this combination OF
extraordinarily favoring influences, to
which may be added the impressions
that the Dawes plan will bring about
economic recovery in Europe, 1t has
to be remembered that the stock
market of the last six weeks has had
an advance almost unprecedented for
similar space of time. Undoubted-
ly Wall Street has been right in pre-
dieting a period Of Industrial pros
perity, but It has been discounting
this prosperity with a vengence.
Particularly has It gone to ex-
tremes in its estimate of railway
values, now that the way Is open for
increased dividends and for carrying
out the combinations which were con-
templated under the transportation
act. Some of the rail stocks which
have risen 10 and Is points in the
last two months are without doubt
going to find the advance justified,
as was that in Southern Railway, ST.
Louis-San Francisco and Missouri,
Kansas and Texas preferred, by the
inauguration OF dividends. But where
the rise has been based upon the
notion that consultations are going
to bring about a big addition to val
ues the whole thing has been over
done.
/ Grain Markets Reach New Highs.
The grain. markets at a new high
for the year, sterling holding firmly
around Its top, the copper metal up,
sugar down to new low-these have
been the principal features of the
week in trade lines. The cotton mar
ket Is still unable to make up ats
mind which will prove the more i'm
portant influence-the largely in
creased domestic output, which is now
placed above 100000 bales, or the
prospective picking up in mill con-
sumption, both here and abroad.
Time money has grown firmer. More
use has been made OF the rediscount
facilities of the Federal reserve
banks. Rediscounts for the system
as a. whole increased last week nearly
$a0,o00,000. These are symptoms
which have to be considered. They
represent a belief that money will
work higher and also they set forth
the fact that the member banks are
no longer able to finance the huge
stock exchange speculation without
the help Of the Federal reserve.
On the other hand. they are symp-
toms which have not yet become suf-
fioiently pronounced to be character
lied as premonitions Of credit
strain. Speculative Wall street has
attached more Importance to the
dropping off in call money quotations,
asserting that this denotes the friend
Illness of banking interests toward
the present stock market position.
Copyright. 1924. By Consolidated Prcss.l