Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-06-26
BY CHARLES r. SPEARE.
,ecial Dispatch TO The Star

| Special Dispatch TO The Star
NEW YORK, June 25.-The proper
tions of the stock market shrank this
week as less confidence was exhibited
In the stability Of prices for specula
tive securities.
Each day witnessed a contest be-
tween the two elements in the mar
ket. with small daily declines in the
price average up to Thursday, when
| a heavy outpouring of stocks resulted
| In the largest losses since early in
| June. At the same time. the unfortu-
| nate conditions in the bond market
| developed a situation that is respon-
| sible for a considerable part of the
| expansion in the so-called brokers
| loan account, with the general run of
clients of the investment banker un.
willing to purchase new issues at pre-
| vailing prices
While the stock market was react.
ing to the number of new develop
ments that were unfavorable. the bond
market continued to reflect a state of
mind rather than any additional rea-
sons for its weakness. There were a
number of indications in the trade re-
views that production was slowing
down and profits declining, with duh
conditions in some of the major IN
dustries likely to contiue well into
Summer. The statistics from the iron
and steel CenterS point very clearly
to this. So do those from the metal in
dustry. There has been no correction
of the troubles arising out OF an over
production of oil. In fact, new pools
are being discovered almost daily and
pouring their streams into an already
saturated market.
General Outlook Is Good.
By and large however. business is
good. If it were not we could not
have the record car loadings or the
bank clearings that are reported
from week to week. Undoubtedly
the momentum of nearly three years
of prosperous trade is carrying the
country along to some extent. This
may wear off after while. When
certain of the large industries, such
as those above mentioned, as we'll as
textiles, woolens, silks, rubber and
sugar, are eliminated, there remain a
great many others out of which the
country is drawing a large revenue
and in which millions of people are
finding steady and profitable EN-.
ployment.
A survey of the business outlook
made at the recent credit mems con-
vention in Louisville is illuminating.
This represents the opinions Of 81
trade groups and thousands of close
students of business and credit con-
ditions. 1t was the composite opinion
of those replying to the QUESTIONABLE
that business in the next three
months will be better. while the pros
poets for the next six months were
rated higher than for the coming
three months. In spite of the current
comment on poor collections, these
credit experts found that payments in
May were better than in April, and
quite as satisfactory last month as in
May. 1926.
Top-heavy Stock Market Menace.
Discussing the business outlook
this week, one of Americas leading
bankers said: After several months
of anxiety over the high price of Sc
curities and the condition of trade. /
have come to the conclusion that we
are so strongly fortified in this
country with money and by credit
relations with the rest of the world
that business seems fair to remain
on an even keel.
THE only fear that / have is that
stocks will be forced up to prices
that will make them topheavy and
may some day topple over. Business
will be affected more by a break in
stocks than by any other factor. The
average merchant or manufacturer
today owns securities, and any dis.
turbance in the market for stocks
will influence his business policy con-
siderably."
What is likely to happen in the
next few months is a more or less
general effort on the part of pro-
ducers to bring down their cost of
production. 1t is significant that the
industry which represents more than