Evening Star Newspaper, December 30, 1922, Page 17

FINANCIAL 1922 HAS PUT BUSINESS BACK ON SOLID FOOTING Biggest Factors of Year in Finance Reviewed—Further Steady Gains As- sured for at Least Six Months. BY J. C. ROYLE. L Dispatch to The Star, = EW YORK, December The vear of 1922 has seen the unscram- bling of virtvally every great Industry in the United States. Business, which for a time rested on the scaffolding and false work of abnormal and sub- normal conditions, again is on a sound, =oltd and permanent founda- tion No boom is in prospect. There are mo indications of frenzied price inovements. Competition will be lieen and profit margins will not be sreat. But there is every indication “rom present conditions that business activity will continue to increase and the level of industrial and com- raercial prosperity wiil continue to @ at least for the next six months. ew standards of comparison have en adopted. Merchunts, manufac- s, farmers and buciness men in rv line have realized at last that nelther the pre-war days of 1914, tie flurried production of the war perfod, the hectic activity and tre-| mendous profits of the years imme- «iately after the armistice nor the! «ark outlook of the years of depres- mion and deflation extending to the Yeginning of this vear, represent any Jonger the rmal level of business. Business Hovers at New Normal Mark This country, right no is ex- yeriencing a greater prosperity than its. oitizend generally realize. The pen- «ulum of business is hovering at or wiear that new normal mark which This yvear's progress has established. ‘That pendulum is never still. Careful cxariination of conditions In every ction of the country indicates that 1he upward swing of prices and pro- ductlon has not heén completed. ~Its omentum bids fair to carry it on r another six months at least and nerhaps longer. Any ewing back nrobably will be at the same steady ace as the advance and will be confined within the same well regu- lated limits. Factors in Improvement. Tiree great rs vo marked the difference hetween the depres: 1921 and the pro of 1922. ey are voluma of production and aales, increase in the buying power of the nation and management. When “he vear opened scarcely an industry operating on a Many plants the country was i capacity basis. svere closed entirely. Many concerns had written off or abeorbed high- priced fnventories, but others still had ods which they couid not move, ogging their advarnce. Demand, however, began to improve suaterfally in the second quarter of Merchants elther wrote off or averaged out thelr high- Inventorles with the movement priced ~f goods obtained at cheaper pric Tiuying was conserved but it was eady, and demand onately. Induatries Near Capacity. As a ‘consequence, at the end of the year, the great basic industries of ara operating close to ca- e greater number have books which will keep an undiminished rate onths to come. The steel industry, one of the surest r.dicators of Industrial activity, just a3 wheat i3 the agricultural indesx, us advanced productten from the ex- imemely low polnt at the opening of o vear to well above 80 per ceat of - apacity for tie industry. In dividual units have attained even liigher Tates of output andj for some ~honths have been turning out prod- s at or above 100 per cent of mor- mal. Umemployment Has Disappeared. Unemployment was a pressing prob- fem when 1922 opened. States, munici- palities and soclal and charitable organi- zations were asked to co-operate Wwith he federal government in meeting it. Today unemployment practically has disappeared. There is a job for every 3:an who wants one and a score of em- oyers to beg him to take it. So great ; sy been the demand for labor, both Siclled _and unskilled, that Industries e still raiding each other for men and lcores of enterprices are hampered in Their progress by inabllity to obtain the srorkers they need. Wage advances wers an inevitable onsequence of thesa conditions. The I“Gited States Steel Company set the pace for the industrial world by an ad- ~ance averaging 10 per cent. This ex- ample was followe in hundreds of other industries. In the buflding 1ades, skilled artisuns haye been able :imost to name their own terms. Pay Toils jumped forward in steps of mil- Yions monthly and buying power was -hus increased far beyond any espec- rations that existed at the opening of the year. Buying Power Increased. This increase in the volume of money wvailable for individual purchases was 510t confined to wage earners. Incomes Uf investment holders were Increased ot only by the genmeral betterment in husiness conditions, but also by the veturn to a dividend basis of com- sranies which had reduced or suspend- vd dividend distributions, and by in- <reased pavments by others which ad been ept forward on the crest £ the business tide. The farmers also have attained a far higher standard of buying power han was expected when the vear opened. Prices of agricultural prod- wcts did not keep pace with advances in other lines, and the situation of ~he farmer was further weakened by ack of transportation facilitles at a ime when they were needed most. But the farmer in nearly every in- ~tance got himself out of debt. He ‘nade his crops cheaper than he had Zor years and was left with a sur- Slus which he was ablo to devote to “lurchases, long detayed, of both ne- assities and luxuriles. In additlon, @ credit situation has fmmeasurably mproved, and there still remains un- old over two billion dollars’ worth of arm products. The proceeds from ese products eventually will find oir way across the counter. In the south the rapid and continued ad- ance in the price of cotton has put he growers in a more satisfactory osition than they have occupled for “ea Margins of Profit Small Prices for finished products ad- \anced generally throughout the +car, but they did mot move upward oportionately with the increase In wages, raw materials and costs of roduction. Producers hesitated to .ake further advances for fear of remming the tide of buying and orcing a renewal of the so-called buyers’ strike” which had been a ‘ugaboo in 1921. As a consequence, margins of profit were small. Manufacturers, whole- .zlers and retailers met this situa- on successtulfy by increeased effi- siency in manufacturing and sales nethods and, in some instances, by riergers and consolidations. Quality «und service, too long neglected as fac- ors in merchandising, again are be- ag stressed. For the first time in -ears the policy that “the customer ‘3 always right” is operative. There e fewer salesmen on the road, but hey are better salesmen. Advertising an Aggressive Weapon. Advertising, especially newspaper advertising, bas been an aggresaive weapon ia the hands of the mer- ~hants. Estimates compiled today In Jicate that the volume of advertising rhis year exceeded that of any pre- ~ious year in bistory and surpassed rhe volume of 1920, the previous rec- ~rd-breaking -geriod, by between 13 nd 20 per cent. Moreover, advertis- 13 this year has been free from the aint that It was used as a3 hiding \ increased propor- | ! place for business profits rather thau | ;a developer of sales volume; The Three Great Strikes. | Three great strikes marked the course of business during 1922, the textile strike, the coal strike and the irallway shopmen's strike. Great as | was the depressings influence of these ! iwage disputes on commerce and in 1dustry, their results were rot entirely ldisgstrous. More than once business {was poised for flights toward infla- tior. It is possible that the labor controversies acted as a brake against 100 rapld advance and resuted in a | steady and healthy improvement, free from the danger of acute relapse. The coal strike, while it delayed | operations and lessened production throughout the industrial world, ‘had an effect more psychological than real. teserve stocks were depleted and prices advanced somewhat. but few plants were forced to draw their fires entirely and production of coal jump- ed rapidly back to, or above, normal when settlement was concluded. Dan- ger of shortage for domestic uses has not entirely passed, although this Is due more to lack of transportation than shortage of production. Shortage of Raliroad Equipment. The rail strike was far moro severe in jts effects. Hardly an industry or i cars and poorness of motive power equipment. This lack of ecquipment was not due entirely to the strike. There are fewer cars in bad repair {today than for a long period, but the strike served to emphasize the fact that equipment was totally nadequate to meet the heavy requirements of rormal business and crop movement. Conditions have improved, but still are far from satistactory. But rail- roads have entered upon the greatest equipment buying campalgus in their Ristory. Orders for thousands of cars are being placed each week, and the carriers give evidence that they do 1ot again int where they must turr freight. Water and truck transp icelved an impetus as a resuit of the {strike. which will be felt by the rail carriers for years. Textile Mills Recovering. | The textile strike in New England i was the longest drawn out i ftory of the textile industry in Amer- {ica. Beginning in February, the last jrumbles "of its discord have just died {away. Both sides lost millions, but, while thousands of spindles were idle, I stocks of cotton goods diminished to revenue away | ed by the consuming public. gotiations during and after the ratl strike was the determination of many roads to deal each with its own men through the formatfon of so-called “company unions” and the announce- ment by’ certain of the national rail- road unions that hereafter they would negotiate with each road fndi- | vidually. The tariff undoubtedly was a potent factor in many industries. The most i general reaction, however, was a feel- | Ing of relief that the schedules finally nd that Lusiness men rdingly. | were settled cculd make thei; It becomes easingly he close of the year that bulld- ing construction was the plllar which { uplheld the structure of business whil i the new were being forge€ and swung into place. The total value of new con- struction in 1922 has been well over £4.000,000,000. The scope of opera- { tions was 40 per cent greater than in {1921 and 30 per cent above the totals for 1019, which had been Jyear up to thls time. No obstacle sufficed to check these tremendous operations w every section of the country and were almost as marked in the rural com- munities as in the citles. Prices for materials advanced dectdédly during the year. Wages jumped to unprece- dented heights. It was no unusual thing during the past year for plas- terers, bricklayers and plumbers, what with extra work and overtime, to earn over $100 a week. Comman labor in the building trades was pald At a rate unequaled except the most active days of the w: Housing Shortage Still Acute. The activity of the operatlons sur- vived failure of supplies, delays in de- livery of materials and wage disputes, and ~ even served to slow the pace only a trifle. Undoubtedly this was because the nousing shortage stiil is so acute { ment. It was due to the wise policy of the producers of building materials, how- ever, that progress was so steadily maintained. Lumber manufacturers, cement makers and brick producers guarded carefully against runaway markets, and, asa result, prices, while they advanced, did eo gradually and without causing panic or uneasiness. Much of the building inaugurated was for business purposes, but the mainstay of the movement was the desire of American citizens for homes. Never before. in a similar period have so many dwellings been built, and never beforephave they been so completely and attractively furnish- ed. This trend has been constantly {felt in the sales of carpets, rugs, fur- niture and household goods, which have been maintained at a high mark throughout the year. Ample capital continues to be available atgreason- a‘b]e rates to finance building opera- tions. (2 panies Increase Dividends. ity is needed, it is to be found plainly in the dividend declarations of the profit in 1922. With few exceptions companiy which paid dividends in 1921 maintained or increased them in the current year. Hundreds of companlies declared ex- tra dividends or increased theirrates of distribution. This does not refer specifically to the number which de- clared stock dividends, but to those ‘which paid actual cash to thelr stock- holders. Increases of capitalization and dis- tribution of stock dividends and bonuses were the outstanding fea- tures of the latter part of 192%. Capi- talization and subsequent stock dis- tributions to shareholders totaled far above one billion dollars im book value. What they amounted to in ac- tual value still remains to be seen. Without question, many companies | took this method and opportunity of | transforming profit surpluses ~ac- i cumulated in this and previous yeats into working capital. Some adopted {this means of making payments of |such profits to stockholders in a 1 form not’ subject to taxation. There is little doubt that still other com- panies followed this popular ‘policy for appearance sake, and stll]l others accepted it just as any other trend of fashion, whether in finance or ap- parel, is selzed upon. Value of Assets Unchanged. So far as stockholders were con: cerned, the actual cash value of their assets was not increased by a single .dime by these proceedings. Their relative interest {n the assets of the companies in which they held stock was the same whether that interest was represented by one share at 'the old capitalization or by ten shares under the new. In potential value, however, the values of their holdings undoubtedly were Increased by this extraordinary development of business and finance. Earnings are the things which will Bseparate the corporate sheep from the goats. If companies can maintain dividends at or in proportion to present rate on the new capitaliza. tions the profits to shareholders will be enormous. Tf they anot do sc the d to be In a position | ation re- { |4 point where the Inevitable increase | in prices wus the more readily aceept- | A marked Innovation following ne- ! evident ! girders of other industries ! the record ich affected | STOCKS AND BONDS | business but suifered in some,way or!was also influenced by another from the shortage of freight| 1 { 1 that nothing could halt the move-| 1 land tube | The pt GAIN Moderate Improvement in Spitg of Heavy Selling. Money Goes Higher._ DURING WEEK RAIL REPORTS BETTER | Cotton Prices at New Tops for Year—Trend in Steel Upward. Associated Press. YORK, Dccember 3u.—Stock and bond prieds showed moderate im- provement this week despite a heavy volume of selling to establish losses for income tax purposes. Foreign exchanges were inclined to epse, first on the decision of the reparations commission declaring Germany in de- fault on her wood deilveries and then on the hitch over the disposition of the Mosul ofl fields in the Lausanne peace negotia but net losses were comparatiwgly, small. Publication of November earnings statements of the principal railroads, which compare favorably with those of November, 1921, stimulated trading in railroad shares, buylng of which the record- breaking volume of trafic for this seuson of the jear. The year closes with the ‘steel industry working be- tween 50 and 85 per cent of normal capacity and the trend of prices up. ward. Building construction shows no sign ot abatement and orders for automiobile forgings give promise of another recorG-breaking year in that Industry. 2 New Highs in Cotton. Cotton prices reached new records for the vear, early months selling around 27 cents a pound, as compared with 15 cents only a few months ago. Wheat prices were inclined to sag, December prices getting below $1.27 a bushel. An increase in the price of Wyom- fng crude oil and additional in- creases lu the prices of rubber tires racted attention !n the and were redlected high spring naneial in higher stock prices. Motor and accessorv vhares were inclined to strengthen {n expectation of good business at the winter shows, which start next mont Studebaker, which sold ex-dividend 25 per cent in stock reste nd closed at 114%, as against 1395 the previous day, really registered a net gain of more than 3 points. Cull Money Higher. Higher call money rates at the end of the week were due to the with- drawal of $70,000,000 by t TUnited States government from local banks and a large volume of withdrawals by private banks znd Institutions to meet year-end idend and interest requirements. Time money aund com- mercial paper rates held steady, with the volume Of bLusiness light. COAL NATIONALIZATION PLANNED BY MINERS: Fact-Finding Committee Declared to Have Fixed Upon Four and Half Billion as Cost. EwW YORK, Deceraber 30.—A plar for nationalization of all coal mines in the United States, prepared by a tact-finding committee of the United Mine Wokers of America, was made public last nizhit before the League for Industrial Democrad by €. J. Golden of Shamokin, P’a., president of | 9 District No. 9, United Mine Workers of America. e contemplated purchase of the mines, Both anthracite and bituminous, atatotal cost to the government of $4. 500,000.000. This tigure was based upon a present estimated private in- the approach of winter!yceiment of between on® and a half and two blllion dollars in soft coal properties plus approximately two billlons in anthracite mines. To brings about such federal owner- ship, the fact-finding committee Would, according to Mr. Golden, re- commend an inter state commission of mines, at the head of which would be a secretary of mines, with a seat in the cabinet. Appointments’ 'to t would be made by the president, and by professional and industrial associ- ations. Its dutles would include scientific determination of costs of production, the fixing of prices to the consumer, ‘the negotlation of freight rates, distribution of the product of the mines and the - accumulation of facts concerning every phase of the industry. Adminstration and operation would be delegated to a national mining councll composed of a financial group. a_technical group, a group to include administrative officials of the in- dustry, and 2 fourth made up of miners and consumers. All would be {appointed by the Interstate commis- | ! i i 1 sion. The plan as o rankly con- { urtt}{ined fr It turther evidence of the prosper- | templated the biFth of a political labor party to assure its successful operation. It would. sald Mr. Golden, last month of the vear. Four out of | be essential in bringing political in- every five companies which made a|fluence to besr on the governmental profit in 1921 reported an increased ; Commissions toward protecting the interests of the miners. ‘The miners designate the proposed program “the American plan. market value of the securities will reflect that fact sooner or later. Profits Greater in 1923. There is every Indication, however, that business profits will be Increased in 1923 more than they have been this year. Margins /6f profits have in- creased with the advance in com- modity prices. Buying power has in- creased with wages, which have shot upward faster than the cost of lv- ing. Buying power, however, is not being misused. The demand in nearly every section centers around useful goods, but buying is featured by in- quiry for better quality and larger volume. In many lines producers now have orders on thelr books which will in- sure continued and profitable opera- tions near capacity for mo:ths to come. Supply and demand rather than artificlal inflation of prices or speculation have determined the busi- ness trend this year and bld fair to continue to do so in 1925, Some Imndustries in Danger. Some industries are bound to lag behind the general trend. Business failures will not be eliminated, for profits will depend more than ever on volume of turnover and efficlent management. Seasonal and sectional conditlons will cause recessions in the price advance from time to time and sooner or later the pendulum of burlgs- will start to swing back- ward. But business and banking cond!-’ tions generally are on a sound basis. Old debts have been cleaned up, strong lines of credit have been es- tablished and savings are piling up at a record r:si':wz o is un- afraid and is face 1923 ‘with confidence courage. Coprrizht, 1822) ° . D. C., SATURDAY, L YEAR 1922 MARKS NEW EPOCH IN C URB MARKET ing—Several Issues -|Palatial Building Ends Outdoor Trad- in Startling Moves. Famed as Home of Standard Oils. | BY WILLIAM F. HEFFERNAN. | Special Dispateh {o The Star. NEW YORK, Dicember 30.—Long before the stock exchange was {n ex- istence an organization known ags the the New York curb market, it is in- : business in stocks apd bonds at the corner of Broad street and Exchange place, New York city. Without delv- | ing too far into the past history of i the New York Curb Market, it lg in- teresting to note the rapiq progress and expansion this organization has made during the year 1922. Not long ago officers and members of the New York Curb Exchange came to the reallzation that this market for stocks and bonds was becoming such an essential factor in the werld of fifance that steps were taken to prepare more adequate facilities for trading and to mect the Influx of new securities that looked to tho curb ex- change as a place for listlng. where could be found a ready and reliable market. Monday, June 21, 1921, marked the beginning of a new_chapter in_the history of the New York Curb Mar-! |ket. On this date the organization moved Into its magnificent new build- ing at 73 Trinity place, Now York city. As one of the means for accoia- plishing this tremendous undertaking it was necessary to Increase ita mem- bership dues. Previous to thls aate, 2nd when the curb market transactad ibusiness In the open, membership dues approximated $265 4 year. While the new edifice was being erected an assessment of $1,500 was imposed upon cach member, for which he was given a realty bond. Curb Memberskips Sought. | _The demand for membership on thac fcurb exchange is without equal fn any other stock market in the coun-| try at the present time, and as an in- stance of the appreclation of seats on the curb exchange, more than one bas sold for the sum of $10.00) dur- 1ing the year 1922 The meinbership quota is limited to 350 members. [ After moving indours the exchange | i also installed a ticker service that is! i operated along the sime lines as that of the New York Stock Lxchang Every transaction that takes place on the floor of the eschange is recorded on the tape within less than a minute after {ts execution, in the offices and rooms of its members, so that the customer buying or selling securitles may see his own transaction offictaily {arinted. { Thesc and many other recent uc- complishments go to give the Xew York curb-inarket it3 place us America’s {second lurgest ‘stock market. Functions of Curb Market. Among the varlous functions of that market are: To provide a “pri- mary” market for Introducing the securities of such industrial, metal, ofl, public utilities of other corpor- atlons s are eligible for listing under the strict re§uirements of the ex- change; to furnish a temporary pri- !mnry market for the preliminary fs- isue of securitics of well know established companies which are b ing reorganized or are {ssulng ad- | ditional ttock, usually represented by “rights”; to provide a market for i ssues in the formative period of thelr existence. which although represent the modt legiti- of euterprise, are more or | ess specuiative even under most: avorable circumstances: to provide a jmarkeL for such other stocks or i bonds. which for varlfous reasons are inot listed o othier exchange. The y_of” the New York replete with examples hat have risen sensation- | ally. This ia forcibly illustrated by he following tabulation of some of I { i ;the more notable speculative ad- ! vances. General Asphalt from 233% ito 161%;: Houston Ofl 1213 to 17 | Consolidated Copper Mines, 1 to 12 Anglo American Oil, 11% to 37; Na- tional Transit, 113 to 40: Todd Ship- yard, 73 to Merritt Ofl, 11 to 43% Tnited Verd! Extension 6% to 43% International Petroleum, 9% to 7 | Cramp Shipbuilding, 29% to =21 | Chevrolet Motors, 50 to 21s. Additional evidence of the general tability and of the stocks { dealt in-on New York curb market {is supplied by the larga number of & | curities that have graduated, to the {New York Stock Exchange. i Graduate to the Big Board i _Before being transferred to the New { York Stock Exchange many of these ! cecurities scored _epectacular ad- | vances on the New York curb maricet. Following is & partial list of securi i ties that were transferred from th {New Yorl curb market to the Xe York Stock Exchange within recent months: Alr Reduction, Ajax Rubber, Alasla Gold, Alaska Juneau, Amer- lican Drug Syndicate, Amierican In- ternational, American Eafety Razor. Amerlcan-Sumatra _Tobacco, Butte Copper and 2inc, Cerro de Pasco, Chile | Coco-Cola, Cosden & Co.i Fisk Rubber, General Asphalt, General Motors, Haskell & Barker, Hendee Manufacturing, Hous- ton Oil, Hupp Motors, Inspiration Copper, International Mercantile Ma- rine, International Motors, Invincible o, Island Oil and Transport, Jewel Tea. Kelly-Springfield Tire. Kenn cott Copper, Keystone Tire and Rub- ber. Kresge, Loew's, Inc.; Loft, In i Mariand Oil, May Department (t new shares of $25 par value are no being traded in on the curb market) Miam! Copper, Midvale Stecl, 3ont- gomery Ward & Co., Natlonal Conduit and Cable, Nevada Consolidated Cop- per, Oklahoma Producing and Renn-' ing, Orpheum Circuit, Phillips Pe- troléum, Plerce Oil, Rand Mines. Ray Consolidated Copper. Republic Motors, | St. Joseph Lead, Seneca Copper, Shell Co.” (Royal Dutch); Sinclair Oil, Standard Oil of New Jersey, Strom: berg Carburetor, Submarine Boat, Su- perior Oll, Tobacco Products, United Alloy Steel, United Drug, United Re- tall Stores, Utah Copper, Vanadium Corporation, Vivandou, Weber, and Hellbroner and White Motors. Theso and many other issues were first traded in on the New York curb ex- change. Many New Stock Issues. ring the past year numerous eo?nunlnfel have declared stock divi- i | 1 d their capitalization. It has \‘z‘:’z‘n““neculury\. therefore, to {ssue new stock in many instances. These rb, and have -been admitted to :E:d;::‘ on a “when, as, and If issue: ek after these rec;]lnflll!la-tlon ans have been approved. plsomo of the largest corporation: he New York curb market. It g‘:-":lv‘ufl been known as the home market for Standard Oil stocks. Sev- dends to shareholders and have re- shares have found a ready market on basis, in many cases within less than a w the country have their securities list- bers of this group have been eral mem transferred Exchange, but th to the New York Stock e n‘u]cflu& !tfllvga- on the curb list and are -in- ::g:wu of the class of secuirties that come under the 'x"d‘n‘ requirements of this organization. ! The following list gives examples of the enormous assets of some of the secuirties traded in on the New Yok curb market: Standard Ofl of Kansas, over $12,000,000; Cities Service Com- pany, over $557,000,00 Standard of Indians, over $287,000,00 8im: Petroleum, over .$27,000,000; Peerless Aotors, over $18,000,000. Greater Capitalisation Trend. Within the year 1932 many of the corporations and companies whose securities are traded in on the curb market have piled up tremendous cash surpluses and-have adopted the plan_ which has been common in re- cent months of distributing thess surpluses in the shape of stock divi- dends to present shareholders. Opin- fons vary as to the main reason for the adoption of these m:ll‘lxlfel, dut explained thet s {der to avold any euch action. actlon has been takeu to provide larger working: capital; so that th compaanies and corporations may be able to provide necessary facilfties to cope with the expense in their various industries. Consequently new stock has been issued to shareholders in the form of stock dividends, in pro- portion ‘to the number of shares held by the investor. Tt has been rumored in financlal cir- cles that in view of revised taxation | methods pertaining to corporation ! cash surpluses several of these stock dividends have been declared in or- How- ever, if these corporations and com- panies -can maintain thelr present dividend rate on the additional stock allotment, then thelr action in mak- ing these large distributions will be Justified. Price Changes of the Year. Price fluctuations thia year have been wide. with speculative and in- vestment opportunities abounding in all sections of the curb market. Dur- ing the first few months of 1922 the automobile {ndustry suffered rather severe depression, and price cuts throughout th!s section of the indus- trial list brought about materially lower levels, On tho other hand, the increased production and output of automobiles by all companies has increased monthly to meet the enormous de- mands of the general public, and haa resulted in a steady upward move- Tient {1 motor stocks until most of this class are at their high levels as i the ‘year ends. Automoblle manufacturers in 1522 have Fnjoyed the biggest business In the history of the industry, with the Drospects even better for business in the coming year. Highk and Low Marks. The month in which the high and low prices of several of the more prominent and active leaders of the motor group were recorded is given below: Durant common touched its low for the rear in the month of Jan- uary. when it sold at 22%; the high prices were reached just before the end of December, when !t sold above il Durant of J ana likewlse reiched ita low recowl rst month of the yewr, whe: $% and moved sympathetically with higher prices in Durant commion, crossing 17 In the latter half of De- cember. Stutz Motor, however, was 4n exception to the general tendenc. but for reasons that were not gov- erned by the Motor {ndustcy, Contl- nental Motors hade its low prics of 5ls in the month of Februury and the close of the year saw this {ssue sell- Ing at its top quotation above 11. Automobile wheel manufacturers shares and automobile accessories moved sympathetically with the gen- eral trend of prices In automobile shares and were actively truded In ;_:::_ughcu: the greater part of the The chain store comipanies and de- partment stores had a big year in 1922 ard many new Issues of this character have reached the Investing public through listing on the curb exchange. The year closes with these !stocks, for the ‘most part, either at or_slightly under thelr highest lavels, Mining ehares. such as copper, zinc and lead, reached the!r highest Ilevels generally around the middle of the year, after which the market for those shares suTered rather severe depression as the result of the small profit margin. Indications point to- ward active trading in the mear fu- ture in. this group. Depresaton fa Oils. 1 sharca, although actively traded in througlout the greater part of the #ear, met with many happenings that were rosponsible for depresslon. The high prices generally were reached in the months of May and June. Salt water intrusion in many of the Aex- !ican wells brought about severe de- ! clines in the shares of Mexican ofl companles and was responsible for curtailment of output by American companies in Mexico with the hope of conserving the future supply that these companies would Dbe called upen to furnish American {ndustries. {The petroleum production of Mexico in the month of September fell almost 7.000,000 barrels below that for the month of June, which was considered the best production month of the year. In addition to this, the most jnoteworthy incldent in the petroleum industry was the continued decNne in the prices of gacoline. v However, with the steady improve- ment in business conditions generally, along with the increasing output in jthe automobile industry as the year progressed, the demand for petroleum products gradually begun to assert itself. In the meantime oil com- panies increased their storaze facil- Iitles and are hold!ng their crude ini the hope of higher prices. (Copyright, 1922.) FINANCIAL SITUATION IN AUSTRIA FORBIDDING Failure of Internal and Foreign Loans and Menacing Attitude of ~ Czechoslovakia Factors. By the Ausociated Press. 2 VIENNA, December $0.—The financial situation in Austria again bears a gloomy aspect because of the lack of success In rasing an immediate in- ternal loan and the faflure of U. A. Venal, representative of the supreme economic council, to place a loan of $16,000,000 abroad. Meanwhile the proposed visit of Ignaz Seipel, the chancellor, to Buda- pest has incressed the ill-humor in Czechoslovakia, which in consequence of the chancellor's appeal to the league of nations to use its influence to have the lost states adhere to the provisions of the Porto Rosa agree- ment and conclude commercial agree- ments with Austria, has closed its frontier against Austrian exports. These factors, coupled with the refusal of M. Jansen, the Belglan, banker. to accept the vice presidency’ s in j of the Australian National Bank, are interpreted as a bad omen and are causing rencwed pessimism and the elief that the Geneva plan for finan- cifl ald is doomedgto fuilure. The sifuation aleo 15 cadsing a revival of réports in government circles that the ‘present bank notes will be exchanged at 2 heavy discount for notes.of the new Austrian National Bank, which, it is asserted, would be tantamount to 2 declaratfon of national bankruptcy. FEWER FAILURES. NEW YORK, December 30.—With & hollday intervening the number of commercial fallures for. the current week were six less than last week,. when 413 were reported to R. G. Dun & Co. In the similar five-day week last year there were 417 defauits. The east showed an increase in fallures this week, but this was offset by de- clines in other sections. Only 54.7 per cent of the total hum- ber of fallures had imdividual lia- bilities of $5,000 or more, compared with 56.4 per cent iast week and 56.4 per cent last year. Y ——— ‘We hope the fact-findiag commis- slon on coal will deem slate within ts D i ‘Eoston Herald DECEMBER 30, 1922 FINANCIAL GRISIS ' LOOMSIN JAPAN Department of Commerce In- formed Situation Is “Not Encouraging.” i YEAR'S LOSSES SEVERE Commercial Attache Calls Condi- tion of Many Banks Dis- quieting. | | The jeur end is emphasizing the financlal problems in Japan which have . chargcterized the last few months, the Department of Commerce Wwas advised tgday by Commercial At- tache Abbott, who declared that even | greater financial problems were pre- saged. AIr. Abbott described the sit- uation as “not encouraging” and re- ported that “the cumulative losse: were weighing heavily on the monecy market. The condition of everal banlks con- tinues to be disquieting, Mir. Abbott cabled, adding that the recent tend- ency toward amalgamation of small- cr banking {institutions showed the efforts belng made by individual banks to avold difficulties. Some of the banks, according to the cable- gram, still appear to carry uncollect- able foans up assets and to pay divi- denda on potentlal earnings, “thusin- :’;(‘:lin‘n;a)t(h. £ lrlllflclll conditions v e for instablilt financial situation. v otes Dusiness Is Handieapped. “A large number of business ins! tution. Ar. Abbott's report sald, “are serfously handicapped by thelr Dast losscs, which have been carried forward until, in meny cases, they amount to mofe than thres-fourths of the paid-in capital. Although it seems anomalous for such companies to continue in business and pay divi- dends, they remain a part of the Jap- anese business world because, possi- bly, Japanese banks are unwiiling to take the heavy losses involved in foreclosure. Even riany well estab- lished concerns find their profits and their credit fuctlities diminishing. ! Mr. Abbott was not optimistic about | Japan's ability to overcome the situa- tion immediately because of local in- fluencing conditions. He mentioned the extremely nigh production costs prevalent in Japan as threatening the country's ability to compete success- ‘l'_qu.'{ with America and Europe In ‘war-won markets.” Even in the do- mestic market, he sald, there is strong {competition except where high!y pro- | jtective tari¥s or subsidics zive &! strength to the home industries, | Strikes on Incrense. i Unrest and strikes increased during | November, according to the cable- gram, which predicted that union strength in Japan would assert itself in the future becaute of the gradual consolidation of the varlous small unlons into a single large organiza- tior. The uncasiness of the ugricul- tural workers is causing concern to the economists, the attache said. Japan's total foreign trade for No- vember amounted to 256,000.000 yen, fof which 129,000,000 represented ex- ports, und the total trade for the ionth marked a new low polnt for the current year. Exports for No- vember Te approximately 10,090,600 yen below Octobe ENGLISH ASSAIL PACKING GOMBINE BY HAL OFLAHERTY. i (By cable to The Ktur and Chi i ews. " Copynigat. 1gmmy 50 AT LONDON. December 30.—Ever since tt first became Lnown that three| great American packing companles were seeking to merge all thelr in- terests in one organization a cam- palgn of vituperation has been car- ried on by the British newspapers, almed at the American packing com- panles in particular and American itrusts in general. English muck- rackers have proved to the satisfac- tion of & large section of the reading public that the American packers are conspiring to raise the'price of meats | and other food products on the Brit-| ish mariet. : Within the lust few d. it has ibeen stated that the American pack- | |ers have tried to purchase one of the jthe London cartage companies with the object of monopolizing. the cart- iage business on shipments from steamer to storage. These charges not only are unfounded but are mis- leading the public into the belief that the United States is the only country where great business enterprises arc |allowed to combine or carry out ex- jtensive mergers, when, as a matter of | Ifact, there eXists in England today!: lone firm of puckers having as ex-| ltensive an organtzaticn for the pro- | duction 2nd marketing of food products as that of America’s big packing concerns. Britisk Firm Spreads Far. . This £ known as the Vesteyr Brothers, is headed by two of the {keenest business men in the Unlited Kingdom, who received their early trataing in the United States. With- in a comparatively ehort time, or vir- tually since the end of the war, this ifirm has bullt up a combination of packing houses and retall stores with ramifications in nearly every part of the world. By the slow process of absorption the Vestey Brothers have secured complete or partial control of 2 chain of stores throughout Eng- land, Scotland and Wales,” the latest estimates placing. the number of their retall establishments at between 3.000 and 5,000. They now control three packing houses in Argentina, two in Brazil, ‘one In Venezuela, one in Madagascar, four in New Zealand and one in Australia. In China the Vestey Brothers own a company exporting -eggs, poultry and other products. They-have their own ships—the Blue Star line—carry- ing their products to and from Eng- land, and control a majority of the cold’ storage houses in the United Kingdom. For efficlency in handling meat and giving it to the British pub- lic at the lowest price. possible this organization is undoubtedly equal to the American concerns. Its poten-! tial power in controlling prices in Great Britain is greater proportion- ately than the stmilar price-making power of the American packers. Coempetition Cuts Prices. Owing to the fact that the London agents of the American packers oper- ate in direct competition with the big British combines it 18 impoesible for the Americans to control the retail prices of meat here. It anything, American competition tends con: quently to lower prices, for perish- able stocks are dealt in and these are necessarily sold within a sHort time after reaching England. One of the regrettabls results of the present campaign agalnst pack- ing industry is the prevailing im- pression that American business methods are entirely wrong and never countenanced in Europe, when, as a matter of fact, Europe is breed- ing today greater combines than were ever allowed to be developed across the Atlantic. but masks them under Ligh S cempany na | | | ! l | | 1 tions during 1 » . FINANCIAL |VIOLENT MOVES IN 1923 BOND LEVELS UNLIKELY Libertys Made One of Year’s Features by Reaching Par—~Marked Changes in Investment Fashions—The Trend. BY GEORGE 'r. HUGHES, 1 Special Dispateh to The Star. NEW TORK, December 30.—As the year closes the condltions which face the investment market and on which the trend of quotations depends pre- | sent both polnts of contrast and| points of similarity with those pre- vailing & year ago. Nineteen twenty-| two qpened with money rates declin- ing wid bonds advarcing.- It closed with money rates stabilized and| bonds, while firm and showing some ! tendency toward higher levels, giving | no indication of a renewal of the rap- 14 advance which marked the first/ half of the year and reached its cli- max about midsummer. For a time early in the year the bond market rivaled the stock market in speculative activity. The rise be- gan In May, 1920, long before there were any signs of business revival| and continued irregularly throughout | 1821 and at an accelerated rate for ! more than half of 1923, Whatever the future may have in store it does mot seem likely that this movement will continue except in a very small way. This 13 not to predict any declfne. It 1s 1nercly to say that the outlook is that investment cecurities Wwill be imaintained around present levels. | g ecurtttes. i while business was |cept In cases such as that of | growing competition of the private p 1z the bond market Degan | menger car and the public. motor b {11 in the depths | frightened capital away from trac tion of the tractions, all the ut:ilities shared the improvement, but the Ruins were greater in the electric l.l“[:;t and power and the telephone i=- Hit by Wage Increases. Taiing up the case of the truc first. the strect car eompanies e especially hard hit by the rapidi- mounting labor costs. Correspond increases in fares were very difhc to obtair. For some reason public service commissions were more reluctant to grant rellef to fractiny companies than to any other of utllities. The 5-cent fare had bece & tradition. In the public mind it had meric not possessed by 4 cents or 6 When rates were finully ra! they were in mort cases outside larger cities, great tnroads hai ready been made inio wurpluses s0me of the weaker compan'es gone iInto bankruptcy. Iractical of them had suspended dlvideads or thelr stock. Investors Fought Shy. 1t becama Impossible for companies to do any naw fina: eat-car ng e fon- is @ con- treal Trumways, where there tract with the city which ! payment of interest ou the bonds. Investors even fought shy the bonds of holding compan any large part of the income of which wu derived from street-raliroad earnl: Aside from the poiitical factors, ompa; the o of depression. As has been invariably | Even the very recent influx of taxicabs the case, capital which was not need- charging lower rates than ever bLefure ed in commerce sought employment [was not without its effect. in the highest grade of securitles, boncs 28 to which there was no ques- | against ali these obstacles. tion about payment of interest and dividends. This demand naturally ad- vanced quotations and the improve- ment spread to the second grade and then to the semi-speculative issues. Finally intercst centered in stocks instead of bonds. Meanwhile as busi- ness slowly revived the demand for funds became dtronger and banks which had Invested _their surpius money In securities offered them for eale. Prices declined corresponding- 1y, but the level at the end of the year was far above that at the be-| glnning and this pressure on lhel‘ maarket {rom boll‘!ing by !nstitutions had largely abated. Tt ‘was in 1625 that lberty bonds reached par a’ter thelir long decline. and even sold a point or a point and a half above par in July, enly to fall} below that point again in October after the government had issued its refunding loan. Effect of Bonus Agit: Fluctuation Itbertys were Gue, therefofe, not only to the changes in| the money narket, but to the opera- tions of the government. Another, factor which influenced prices more} or less was the persistent agitation in favor of a so-called bonus far vet- erans of the world war. In this re- spect the situation at the opening of 1923 is not very different from that of a year ago. Both houses of Con- gress passed the banus bill. Presl- dent llarding vetoed it, and the & tempt to pass it over his veto failed in the Senate. But advocates of this legislation gathered mnew courage from the result of the election and asscrt they Intend to press their ad- vantage at thc uext session of the nationa! legislative podiez. The lib. erty bond iarket therefore still faces the prospect of compeiition In some | form of government security issued i %o Tecompense the former soldiers. Railroad Secorities Gain. TRallroad seccurities advanrced the T with | st of the bond market for the s in July lndh.\\:‘u t and receding with u subsequ zo:iry which still left them above tiie priccs prevaliing last January. Jere foor however, other ~conslderaNons t rates for money in- than the curren finenced the market. First came the etrike with Its disastrous effect on earnings, then came the election over- turn which enormously added to the power and prestige of those repre- rentatives of the -agricultural west who Insist on lower rates on products of the farm. They also demand the Tepeal of the transportation act. or at least of that clause which appears to guarantee to the ruilroads a fair re- tuin on their invested capital. Whether the agricultural bloc suc- ceeds or does not succeed in its efforts, its activities cannot be helpful to railroad securities. Stocks of course suffer the most, but bonds are not exempt. Even {f the recom- mendations of President Harding pre- vail and the Interstate Commerce Commission {s entrusted with the authority to fix both rates and wages, | it will be but a short step further to government ownership and operatlon. Mevement of Foreign Bonds. movement of foreign bonds dur- ing year just closing has been one of striking contrasts. The posi- tion of Great Britain as evidenced by the course of sterling exchange is greatly improvcd and, next to that of Canada, the credit of the United Kingdom in our markets is higher than of any other foreign ocountry. Tt is far different in the case of France. French bonds at the close of the year are, If anything. lower than at its beginning. They reached their high prices in March and April and then fluctuated with the news from abroad as to the outcome of the repa- rations tangie. They reached their low point {1 November and carried with them at that time the obliga- tions of Belgium. About the same period American investors developed a sudden timidity about South Amer- {can bonds, notably those of Brasil. 1t was not until eupport from power- ful interests came into the market that confidence was in & measure re- stored. Outlook Still Encouraging. Even now the outlook of placing forelgn obligations in this market under any advantageous terms to the borrower is not encouraging. It Is atso to be noted that London bankers are actively competing for European business in the way of government and municipal loans T:;d that the British Investor, perhaps calise of his greater famillarity wi conditions outside his own country, is much more courageous than the American. Brazilian bonds, for in- stance, are better taken in London than in New York, and the same is true to a greater or lesser degree of French securities. If the coming rear should w gettling of the reparations problem on 2 reasonable basis and a definite ! Ts urderstanding could be reached as to! the international debt, a tremendous impetus would be !mpurted to the market for foreign bonds which are now selling to give returns that would Liave beea regarded as fantastic in 1918, Investment Faskions Change. One of the most interestl: devel- opments of the year may be found {n the changing fashions in investments. For amany years there were only two classes of bonds in which there was any wide distribution—railroads and industrials. Under the head of indus- trials, public utilities were included. Ratlroad issues, however, were re- garded as entitied to at least 50 per cent of attention. There is still large inter in rail bonds and rallroad financing. and raflroad offerings were prominent topics all through the past twelve months-” . It vru‘ no';l rafl lllll.:. .inmhueu. that made the greates lvances, nor was it lndultfllla but rather the utilfties. Part of the favor shown to the utilities was due to fundamental causes and part to the fact that dur- ing the war and war period of high costs. ity pressed out of proportion to other securities. There was s complete re- versal both in ophio‘x‘l_ l‘:ld 1';!1 ai P 2h ‘he ¢ J ~ of the year reaching their |l ness a | Government nds had been de- | od: ‘The street raliroads made a good figh! They intro- duced the one-man car and economized in opera: in every possivle way. They also adopted the motor bus 2= feeder and, in consequence, it is prob- ly true that their credit at-the end of the year was better than at the be. Traction securities sill s to give high yields compared with ot utilities. Favor Shown Gas Issmea. Cas oompanies fared much bet than the tractions. Increasing favo" was shown toward their securities all through the year, although ther, too. suffered from the attituda of the publlc authoritles in insisting t rates be reduced fully as fast as, not faster thar, costs. Electric light and power and tele- phone {ssues lhave been eager' bought at advancing prices. Expar slon i both thess flelds has be: steady. The elec light compani find difficuity In keeping up with the emand for additional gervice. Thera ems to be no limit to the increase in the number of telephones. The re- sult Is that good first morigage bonus f either of these utilities cannot be secured to give much better than a 5 per cent return. Even the preferred stock of these companies finds a ready marke. among investors and in one notable instance, that of the American Telephone and Telegraph Compary. financing was done by the sale of common stock. In fact, the distrib: tion of stock to the amount of $1 000.008 by this company without any underwriting was one of the most slgnificant investment developments of the year. American Telephone Telegraph has now the largest nu ber of stockholders of any America: corporation. Among the electric light compani the Brookiyn Ediron successful financed iis needs by the sale of ad- dftional! stock to its shareholder: There arc many other instances the case of smaller corporations sca tered all over the country. All th! hauknt\:ry favorable effect on the uarket price of telephone an i ligh tonds. o o Castomer Owuership Popular. Along the same line was the d opment of the customer ownership lan. Many utilities, especially in the middle west, utilized this method of financing to a grest extent during 1922. The idea is to sell small lots of preferred siock to the people the util- ity serves, thus making them partners and securing their moral, as well as their financial, support for the cor- poration. The story is told of a western u ity which had a case pending inv.lv- Ing rates before the local municipal authorit} At the public hearing the representatives of the company were astonished when &« prominen: attor- ney wlo had never been conected the utility in any way made an elo- quent plea for fair treatment, speai- ing simply as a citizen. After the hearing was over the ar- torney for the corporation expressed his gratitude and asked why this ge tleman had come to thelr assistanc The answer was that the spcakers daughter had bought one share of the company’s preferred stock. "o pro- tect that 3130 {avestment this sitor- ney made a plea for which Le would have charged any client at leas: § (Copyright, 1922,) RAILWAY ACCIDENTS DUE TO MALICIOUS TAMPERING Iaquiry into three recent raflway accldents, which took piace at widely separated points. cisclosed that all three were due to maliclous tamper- ing with rdiircad awitches, accordinz to reports filed yesterday with the Interstate Commerce Commission by its safety inspectors. 2 A derallment on the Atchison, To- peka and Santa Fe at Landco, Callr.. resulting in the death of two em- ployes and & mail clerk and injury thirteen others, the inspectors found. was caused by a switch having been opened with malicious Intent, whila a frelght traln derailed on the Great Northern at Andover, Minn, was ditched by a similar cause, The wreck November 24 on the Texas and Pacific rallway at Macks, Tex., in which one person was killed and thirty-one injured, was caused, the Inspectors declared. by a dis- charged negro track laborer, who de- iberately opened the switch, expect- ing, the inspectors sald, to wreck a freight train and rob broken cars ol the merchandise contents. _— RECORD YULE TRADE. Estimates Holiday Sales Heaviest in Years. Although lacking éeflnite figure:, Department of Commerce officlals us- sert tiat the Ckristmas buying this year was “exceptionally large.” De- partment and other stores have rr- ported sales among the largest many years. Mall order sales, it is stated, were the largest on record. Wholesalers Teport several months ago—the season of buying by the stores—that th’el! had recelved unusually heavy calis. The situation brought about by the heavy Christmas buying was belleved to presage an early resumption of wholesale selling to refill the shelves emptied by the holiday trade. It may mean, some officials say, an earlier adjustment of prices to new levels, but, without the figures on which to base calculetions, none care to haz- ard a guess as to the trend. — Why She Noticed It. From the Pittsburgh Sun. Little Leia, who has to pass a giue factory on her way to school, re- belled on account of the disagreeablc or. “] wouldn't mind (t wo much mamma,” she remonstrated, “it I had been born with a deaf and dumb neze.”