San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1924-03-02
Financial Situat;cr Changes
Very Little During the
Last Week.
COTTONDECLINE NOTED
French in Critical Condi-
ton Due to Initiation
of Internal Loans.
BY STUART p. WEST

Copyright, 1924. by Consol Press Assn.
New York, March 1.-The financial
situation at large has changed very
little during the last week, but there
has been a revision of ideas and this
revision has resulted in a sounder
conception of the outlook. During the
greater part of January, Wall street
was letting itself get altogether too
enthusiastic over business conditions.
1t was talking with too much as
surance about. the presidential cam
paign. 1t was giving an ear to in
flation talk based upon the high ratio
of bank reserves and the continued
flow of gold into the country.
The consequence was that the stock
exchange campaign was carried too far.
1t did not go to the excuses OF q
year ago, but it went further than
was warranted by the state of things
outside. A reaction was sure to come
and it occurred two weeks ago when
certain spectators made up their
minds that the public could be scared
over the oil scandals being exposed.
Whether or not these operators were
able to get away with their paper
profits is immaterial. The main point
is that they have been proven quite
wrong in their statement that the
Washington investigations are under
mining confidence in the stock mar
ket.
Market Largely Professional.
The market has settled down into
a series of narrow price swings, dom
mated by the professional element, and
with outside participation small. This
is not to the liking of Wall street
following, but it is much more in ac-
cord with the outside facts. During
the last week or so a large number
of corporations have been reporting
for 1923, and some of the results have
been quite out of line with the express
sions of optimism. Along with this
two Of the leading copper companies
passed their dividends, two of the big
rubber and tire producers came out
with pretty poor statements and the
January railway figures, showing in
many instances heavy shrinkage from
last year, were distinctly disappoint-
ing. All this has had a subduing eff
feet upon sentiment. 1t has taken the
keen edge off the speculative spirit
of a month ago. But it has not led
to any such revulsion of feeling as
occurred in April, 1923, for the plain
reason that this year there has been
no over-buying in industrial lines, no
excited price advance, and no serious
transportation.
Cotton Decline Notable.
The notable episodes of the past
week outside the stock exchange were
the further decline in cotton, carrying
the price down almost 8 cents a
pound below the high of the early
winter. the rise to new high levels in
corn and the failure of French francs
to rally under what would ordinarily
appear to be highly favorable develop.
ments.
The cotton position is still rather
obscure. After a drop as violent as
that Of the last month, the stage must
be near where makers of cotton goods
will find it worth while to start up
again. On the other hand it is still
true that print cloths and other lines
of cotton goods are selling relatively
lower than the raw staple. The ques-
zion which the market has to answer
now is whether the cotton mills are
willing to operate on a reduced profit
margin.
Ten years ago a succession Of three
billion bushel corn crops would have
meant an unmanageable surplus and
decline in prices to point where
the farmer would have to sell at
loss. Now a harvest of such dimen-
sions is easily absorbed, and it is
doubtful whether on account of the in
crease in the direct demand or in the
indirect demand represented BY corn
fed animals, world requirements have
not outstripped supplies.
French Situation Critical.
Adoption by the French chamber
of deputies of the new fiscal program
which includes the 20 per cent tax
increase and retrenchment in re-
construction expenditures has failed
to more than temporarily help the
franc. Neither has the statement by
the French president that there would
be no more fresh borrowing, that
whatever deficit remained in the ex-
traordinary budget would be provided
for by a larger postponement of pro-
jects in the devastated regions. Equally
ineffective have been the favorable
forecasts regarding the Dawes COM
mittee report.
One explanation for the responsive
ness of the franc lies in the considera-
BILE degree of initiation which has crept
through the piling up of internal
loans and the rapid expansion during
the last two months in paper note
issues. The second explanation is that
there has been a loss of confidence
among holders of the franc, because
the situation during the last year has
been so persistently msrepresented to
them.
Street Accepts Tax Compromise.
Wall street is disposed to accept the
compromise tax program as the best
that could be expected under the CIR
cumstances. The Mellon plan for 20
per cent maximum surtax would have
made it worth while for people OF large
incomes to shift over from tax exempt
to taxable securities. A 81 IL per
cent maximum would not. 1t would.
however, encourage capital to go into
business undertakings which return
more than the better class Of securi-
ties return. Then besides, there is the
Ekelihod that the 81 IL per cent sur
tax will be shaved down after the SEN
ate has acted and the new revenue bill
goes into the conference committee.