Evening star., 1924-01-06

DROP IN EXCHANGES
GENERALLY IGNORED
Wall Street Considers Lack of
Alarm as Remarkable Fea-
ture of Week.
1924 CONFIDENCE GROWS
Heavy New Financing Expected in
Near Future.
GROWS
CONFIDENCE
ny GEORGE It. HUGHES.

Special Dispatch to The Star
NEW YORK, January 5.-The close
of the first business week of the new
year finds financial and commercial
sentiment quietly confident of the fu-
ture.
The unfavorable features, chief
among which is the decline in tho
exchanges, are generally ignored. 1t
is not a little remarkable that the
sharp break in sterling and the new
record low for French francs should
have had so little effect on either in
Nestment or speculative opinion as
reflected in the market. but such is
the fact.
No Alarm Over Exchanges.
For the past three years economists
In reviewing the past and forecasting
tne future nave been putting the
cnlef stress on the chaotic conditions
abroad and the reaction such condi-
tions might be expected to have on
! prosperity at home, but so far that
reaction has been of small impor-
tance. 1t is true that the wheat
grower has suffered from the world s
surplus of his product and that the
copper producer finds difficulty in
hhding foreign customers, but these
are exceptions. Domestic business has
run on In accord with trade and
money tendencies on this side and
without much attention to affairs in
Europe. So the financial community
mas watched with interest the slump
In the exchanges, but has refused to
be disturbed thereby.
French Bonds Hold Firm.
In this connection the way in
which French dollar bonds dealt in
a hall ~.
TALL in francs, has caused no little
comment. There is, of course, no
logical reason why a bond of the
french government payable principal
ana inteest in dollars should fuctuate e
IN market price with the quotation
Ior French currency and no one sug-
gests that the French people would
ever allow their own financial diff
cultles to interfere with the service
on their external debt. which, by the
way, Is a trif1ing proportion of their
entire Indebtedness. Still, sentiment
In these matters is often more pow
erful than logic and it might have
oeen anticipated that the doubt about
lhe French financial position which
@rcbn are so eioquentiy reflected in the
Sern among American holders of
rrench securities no matter in what
currency payable.
III is perfectly possible that such
al
time, but this week, at least. and TO
GATE IT has been conspicuous by it's
dpSence. :" That being the case II
seems reasonable to suppose that any
solution of the reparations probe m
sHuiiclehtiy broad to relieve the
french financial strain would be fol-
lowed by renewed investment inter
est In French dollar bonds. Such So
luuon, however. it must be admitted
uUes as, not seem TO be In sight, although
tnuTh IS noped Tor from the investi-
salIohS or the International experts
Good Investment Buying,
Meanwhile there has been nood ab-
sorptlon of the middle and second
grade investment bonds. January is
Il traditional time for the reinyest
inent OF interest and dividend dis
bursements and these Disbursements
nave been unusually large this year.
There has been no rush to buy nor
was there any anticipatory rise in the
BOND market. Buyers seemed to feel
that they had plenty of time to ac-
9uire desirable securities before there
was any substantial advance in the
market They have also given the
preference TO obligations on which
the yield is at least 5l@ per cent.
Ihere mas been no weakness in
bonds of IA higher grade, but the
greatest interest has been shown else
where. Opinion as to the future OF
the investment market is not a unit.
On the one hand some observers
expect that the ease in money and the
abundance of funds will result in ad-
NancinS prices for high grade securi-
ties. On the other hand those who
foresee substantial increase in bust
ness activity and consequent demand
Tor money for commercial purposes
do not look for higher quotations for
the best bonds.
They hold that securities dependent i'm
:, greater degree upon the financial con-
ditiqn and the business outlook of
the Corporations concerned will he in
greater demand. Judging from the
action of the market this week the
conservative investor is taking the
middle course.
While there is a large amount of
new financing scheduled for this
month investment bankers are in no
haste with their offerings. They, too.
seem to feel confident that their op-
portunities for doing profitable
business will not pass in a moment.
There is a good deal of railroad re-
funding to be done and the public
utilities are always in need of capital
n for extensions. What will be offered In
industrial obligations is not so evil
dent. The significant fact about what
has come to be one of the greatest
OF American industries. namely. the
manufacture and sale of automobiles
! and motor trucks. is that there is sc
little call for additional capital from
outside the business itself.
The capital invested in motors. both
passenger cars and trucks, is esti-
mated at s1,450,00O. 900 and the indus
try last year paid the employees nearly
$400.000,000 in wages. Financially the
leading producers are enormously
strong. The balance sheet of one
manufacturer. made public this week
shows cash and government securities
in excess of all current liabilities anC
no funded Indebtedness.