Evening Star Newspaper, December 31, 1923, Page 17

Eixcessive Caution Shown in Stock and Bond Trading; THE EVENING STAR, WASHINGTON, D.. ¢, MONDAY, DECEMBER 31, 1923. WALL STREET'S: QUTLOOK FOR YEAR DECLARED TO BE HIGHLY FAVORABLE Election Effect, One Aspect Difficult to Annlyie; Market Gauge to Business Condi- tions During 1923. BY STUART P. The principal purpose of a year end flpancial review ought not’ to be to restate facts with whieh the public is already familiar. It should be, so it would seem, to examine what hus happened during the past twelve months with a view to the light it may throw upon the future. Possibly the most distinguish- ing thing about the security mar- kets of 1923 is that, over long periods, they lost their traditional tunc to WEST. foreshadow and discount changes in the business world. In the excited rise of February and March Wall street was talking about another inflation and husiness boom like 1919. From April 1o the end of October, with the ex- eption of a brief revival in mid- mmer, the financial _community went to the opposite extreme, aban- doning itself to pessimism as extrava- zang as it was unfounded. . The point is that, in both instances, ‘Wall street completely misread con- ditions, A serious danger existed that o speculative movement qn the stock exchange would influence thg valculations of business men outside zetting them to overstock with high priced goods during the excitement of the spring, and scaring them into shutdown by the display of per- sistent and apparently unexplainable weakness through the summej and early fall. As a matter of this sort did actually happen. tain basic lines of industry there was overbuying early in the year, and later on, when Wall s&treet prices were tumbling, a feeling s caution began to spread in business circles. MR, WEST. fact something of In cer- Little Harm Done. Happily the financial markets righted themselves before much harm was done. The turn came at the close of October with the declaration of an extra dividend by the United States Steel Corporation. This action by the largest American industrial organization was instantly interpret- ed as an authoritative expression of confidence in the future. It led the way to a reversal in sentiment on the stock exchange, which, in the last few weeks. has found reflection pretty generally in outside trade. It seems fair to regard the Wall street advance of the last two months as something more than a recovery from prices that were un- warrantably low. It has also been a_genuine expression of opinion that the present satisfactory conditions obtaining at the present time in most lines of business will continue well into the new vear. What will happen later will depend. probably more than anything else, upon domestic politics. It is traditional in a pres- idential vear that both business and the markets maigtain a waiting at- titude for some time prior to the nominating conventions, and that un- less election results are reasonably well forecast, they go_ very slow through the summer. The discount- ing_movements have rarely started until a month or so before the No- vember polling. Radical Policies Seen. Radical policies are going to be urged with greater force than in any campaign probably since 1900. The main question is whether these radical ele- ments will succeed in capturing, at least in partly influencing plat- forms and candidates. This will be settled at the conventions in June and July. The business world should be able to judge after them whether or not it must prepare for subversive changes. Outside of poltical uncertainties there are distinctly more favorable points than unfavorable in the gen- oral outlook. Under the wise direc tion of the federal reserve heads fears that the great gold accumula tion in_this country would be a tamptation to over-speculatipn and inflation have been digpelled. The addition of another $300,000,- 090 or so to our gold supply during the last twelve months will not be regarded, as some would have taken It a year ago, as a danger symptom. The ~American credit system has never been more sound than it is to- day. Legitimate business has never been more assured of obtaining all the bank accommodation needed and on moderate terms. Ban on Excesses. At the same time, the reserve board has given proof, as it did last spring, that it proposes to shut down upon any excesses—any over-Quying and over-borrowing—such as led up to_the orisis of 1920-21. This strength of the credit position ‘with the enormously important sup- porting factor of the federal reserve, Is the most hopeful feature in the present situation. Next to this is (the unusual spending power of the laboring class, due (o fall employ: ment at high wages. It is curio how in the latter,part of the vear this point has been dwelt upon, whereas six months ago the same shortage of labor, - with resulting high wages, was 'deplared for the manuer in which it struck at the profit margin. But it is true that this buying capacity of labor has been -the chief sustaining force back of the general business volume. To it may bo credited the record-break- . ing totals in the retail distributive trade. To it may be ascribed the unparalleled raflway traffic, with consequent maximum gross earnings. Is this characteristic of the 1923 situation likely to be carried over into 19247 \Apparently it is. Under the present immigration restrictions there seems no likelihood of such an increase in the labor supply as will depress wages aund thereby bring down the buying power of the wage gurners. nrie chief bemeficiaries are the merchandisihg companies, which have a large turn-over at campara tively moderate prices. These feel the stimulus of the buying mové- ment and yet are able id pass the extra labor costs on to the consumer. Labor Cont Cuts Profits. On_the other hand, with most of the basic producers the high wage scales are an offset to the large busi- ness volume. It is reasonable to pre- dict for most of these industries much the same /sort of econditio: during the coming months that have obtained during the last year, namel! moderately satisfactory / profits, but with high labor costs preventing ani wnusual return. The two most important remainin; ts ‘of the situation are- gulture and Européan affairs. The Department. of ‘Agriculture has esti- mated -the total value of the past year's cyops $880,000,000 in excess of the year before. This has resulted from the great rise in cotton, the un- usually high prices “which the corn raiser was able to seécure and the more moderate improvement in - a good part, although by no means all, of the live stock industry. Outside of the wheat éountry it has been, in the main, & good year for the farm- er. The figures have failed to justify the talk of agricuitural -depression which was so common Bix. months ago, and they have belled the pre- dictioh made at that time that the ion, which is | or | purchasing capacity of the farm population would fail off and so have a depressing effect upon . “general trade. The testimony to’ the con- trary lies in the unsurpassed earn- ings of such enterprises as the mail- order companies, whose main busi- ness is in the farming states, and in the extraordinary volume of rallway trafc during the aujumn and early winter. i Farmer Reasoned Falsely. The unprofitable conditions in the wheat trade'are purely an episode by themselves. They must bé dealt with first of all through a clearer under- standing of the causes which brought them about. For a long time the farmer was persuaded that the trou- ble lay in Europe's inability to buy } for her normal needs. In reality, if this has been a factor at all, it has been only a minor one. The essen- tial points were, first, that in view }of the largely increased production in other countries, the American farmer planted altogether too much wheat in the fall of 1922 and the ring of 1923, and, second, that on account of the disparity In wage costs American wheat growers can no longer compete in the foreign market and make money. The cor- rectives lie in a diversion of wheat the idea bf producing for the home demand alope and-some form of co operating ghmarketing. Preliminary figures for winter wheat indicate that {fall planting was cut down between {13 and 15 per cent. It remains to Ihp Seen whether the spring wheat farmer will follow this example. Turning to European affairs, the general outlook certainly has nat | been improved, but, on the whole, has | grown more dubious than it appeared {a vear ago. “The best evidence of this is afforded by the course of the exchanges. The pound sterling is | selling, roughly. 20 cents in the round under what it was at the start of last January. Partly this has been | due to the swing in the trade balance more and more against Great Britain in the latter half of the year. Pafitly it has been the result of large pur- chases of American securities by British investors wishing to have more of their fungs in obligations on which interest and principal are pay- able in dollars. British political un- certainties and the unrest growing {out of the unemployment problems jbave been complicating factors. g Franc at Record Low. The French franc has come down { from a high of 9.37 cents in the spring of 1922, and 7.42 at the beginning of 1923, to where it has been quoted at a record low below o cents. This de- cline has occurred despite a steady improvement in the French foreign trade and increased activity in in- dustry at home. In 1923 French ex- ports rose 41 per cent and imports 37 per cent over 1922. The import excess was_ brought down to 1,433,000,000 francs during the eleven months ended November 30. This sum, it is calcu- lated, was covered by what was paid in by foreign tourists, so that France is { mot running any more into debt in its routine outside operations. It a nation's credit were determined by the |state of its foreign commerce and { domestic industry alone, there would frane. But a still more important consideration ‘s the condition of the national debt, whether it is likely to grow or diminish, and whether of not the ability to redeem this debt is be- coming less or more sure. Explanation for the downward move. ment in the franc is that without Ger-. man reparations, France cannot nos | sibly hope to hatance 125 extraordinary budget, and that the chances of ever collecting- a sufficient sum from Ger- many have steadily dwindled with the course of the year. The total debe before the war was 34,000,000,000 at some 430,000,000,000 When it comes to financing the .huflxet requirements next spring the French investment community will be asked to take, on top of this tre- mendous load, another 20,000,000,000 or more. What will the response be, especially as the great decline in the purchasing power of the paper cur- rency has quadrupled the cost of Xl\'; ng since 1914. pon_the answer to this question great deal depends. The moment the French peasant gets fired of putting up money for these loans awakens to the truth about the un- certainty of reparations, will be a bad moment for France. It will mean in- crease in the already heavy burden ‘of taxation, and if this is not sufficient, as undoubtedly will be the case, it will mean resort to the desperate expedient of paper note inflation. As the German financial position ap- Dpears at the year end, the experiment with the new renten’ mark currency will fail, because no amount of abridging the paper money unit will avail while a terrific. budget defleit remains. Much is hoped for from the two investigating commissions which will go inth Germany the middle of January. But sooner or later the 80~ |lution of Germany's financial problem would seem to be along the lines |which has worked successfully in Austria, namely, the use of interna- tional credit to stabilize the monetary system on condition of international control of the German budget. (Copyright, 1923.) GOOD TIMES AHEAD IN PACKING INDUSTRY Thomas E. Wilson Reports Busi- i nedd Sound and Earn- ings Fair. | Special Dispatch to The Star. . CHICAGO, December 31.—Thomas E. Wilson, president of Wilkon & Co., say < | “The packing business 'is in a |fundamentally sound position and. the jcompanies should end 1923 with fair carnings. There arg some problems i nthe packing business today, just as in_other industries, but) they are ibeing solved in a satisfactory man- The fundamental condition of the packing companies is ‘stable, and that is the main thing to be con- sidered. “Raw material costs are much lower and selling price levels, which sliow declines from peak prices rang- ing from 20 to more than 70 per cent, jhave resulted in’an increased ‘con- sumptive demand, especlally because of the full employment of labor in all dndustrial centers.. Labor short- age is not a serious factor in the in. dustry. ’ “Meat production during the year ‘was the greatest in: the history of the nation, and will exceed the year 1922 probably by one and one-half billion pounds, owing largely -to the increase of pork production through the buying and handling of nearly ten milflon more hogs than last year. “There has been a littie overproduc- tion of hogs and cattle, but the de- ‘mand for meat products has been well maintained despite the vast numbers of live stock that have cgme to mar- ot, and ‘the production” is movini Tapidly into trade and consum channels:both here and in Euro) 2 > \ territory to other crops, adoption of | have been no reason for the fall in the | and | 2 E{dmu LIVE STOCK PRICES IN 1923 RATED LOW Producers Have Been }oorly Paid for Work and Worry of Past Twelve Months. ENORMOUS SUPPLY OF HOGS Public Buying Greater Than in Previous Year. BY L. €. GRUNELAND. Live stock trade has been uncertain during the year 1923*as it was in 1922. At the opening of the period trad- ers lookeg, for Improvement, more or ‘ess because of the hard hit industry the year before and ‘in some in- stances present values show up better than at the outset. Taken as a whole, however, producers of live stock have been poorly paid dur- ing the year, and the fact that there still_seems to be meat supply on the hoof in suffi- clent quantity to supply the couns try’s demand must undoubtedly be credited to the Amer- ican farmer's tenacity and his refusal to quit even If facing more than tem- Porary loss in his business ventares. The public has showed more buying ability than during the vear previous. Not only thi but it w: evident {from the start that better quality stuff was called for, and the producer {responded by _bringing improved grade stock to market. 1t was found, lowever, that foreign demand was not broad enough to give much sup- Pport to the markets, and the ready product had to depend on home con-, sumption for practically all outlet. ) MR. GRUNELAND, Recelpts Show Increa: early a million more animals ar- {rived at Chicago market the first half jof the year than during the corre- sponding period last year. This wai caused mostly by an unexpected i crease in hog supply. Cattle also in- creased during the period, while the sheep run dropped off somewhat. In the cattle trade the feature has {been the continued good demand for fat stock Quring the first half of the year. while the last period has show- ed urgent demaund for light steers and yearlings of prime quality. Farm- lers who held their heavy cattle for {extra finish did not make the expact- ed profit during the few last months, {but they have been ahead with plain stock to sell. Quality improved during the first {months of the vear at the Chicago | market, but this was to the detriment {of the stock in the country, and dur- Mg the closing months tie percent- age of short ‘fed cattle has been pro- portionally large, as the number of | grassy animals also have outnum- ibered the expected figure. The re- sult of this has been an-uneven mar- ket, with plain grades harder to han- dle’than at any time since before the |war. At the close of the year choice yearling steers stand at the top, while heavy animals have fallen below the {light stock during, the last few. i months In the early part of the year stockers and feeders were in good de- mand, and country buyers took much stuff at relatively high prices. After { the. first few months they had to go {after thin stock, which did not give the profit expected. The total supply of balves for the~vear has fallen short of last year's run, and the trade { has been extremely uneven. The hog market has been featured by a heavy supply. The trade started ith prices for best stock around 9.00, but the heavy runs resulted in lower values. Large runs were ex- { pected the first half of the year, but most of the trade looked for a de- {crease later. Contrary to this the supply has continued large, with | close to record figures for days and weeks during the last two months. { This again broke values from the in- creased levels noted in September, and the ciose of the year finds hogs far below the price levels obtained at the outset. Compared with other branches of |¢he live stock trade the sheep mar- ket has showed the most even tone during the year. This was caused by a less liberal supply, but even this end of the trade closed far below the year's high spot. Feeder buyers had information making them believe, and correctly so, that the year’s supply of lambs would be comparatively light. On many sessions they bought feeding lambs ‘at higher prices than those paid for choice killing stock, but with the lower values at the close of the year, they have found it hard to escape without a loss. September High Month. The cattle market started the year with top lots at $11.50, and the best steers brought $11.85 during January. The more or less questionable figures, which traders call “average price was then placed at about $9.00, but tops and averages dropped from the opening. 1In, March the best price paid was $10.00 for the week ending the 10th. A steady improvement was Vnoted later, the top of the market golng to §13.10 in September. From then to the close of the year choice steers and the best long year- lings have been in-a class by them- selves. During the last month or two_the best steers have showed to vantage, but demand for plain stock has been about as uneven as at any time in the history of the local yards. Western cattle have come in compe- tition with plain quality natives, and sellers have had hard work moving all stock that did not show good quality. ~More than 3,000,000 cattle have arrived during the year, show- ing a decresse over the number re- ceived last year. About 1,000,000 cattle have been shipped out of this market for all purposes during the jear. The supply of calves have fallen short of. last year’s run. Heavy Hog Supply. The hog supply for the year has been one of the largest in the history of the trade. The figure is placed at a round number of 10,500,000, against 8,156,472 last year. The high spot in the hog market was reached in Sep- tember, when best lots went at $9.75. At the opening of the year best hogs sold at $9.00, but it was a steady drop down to- §' in June. From that point the trade gained until i¥ made the high point. When the supply showed up so much larger than ex: pected, however, and with little de- mand outside of-domestic sources, the market was uneven. During Novesr- ber. the best lots sold with an aver- age below $7.00, while cember has found the market at o point of e year, Wi [l prime heavy butehers’ below 18%. Early in the year light hogs held the best prices, but a more or less active demand for lard helped heavy stock to best price levels later In the erfod. About - 2,400,000 hogs have een shippgd out of the local market during the year. . ‘While the year's total receipts of sheep and lambs has not shown a large figure, the ‘bas ed the strength which most of the sellers had expect: Only about 4,000,000 ‘e arrived during the period, show- e change from -the figure ¥n year, when the total was about + VICTOR B DEYBER 1st Vice Pres | 1923 SHOE TRADE POOR. Footwear Business on the Whole Proves Disappointing. Special Dispatch to The Star, NEW YORK, December 31.—Trad- {ing in- footwear during 1923, which |started oft with good prospeits was disappointing, on the whole. A de- crease in business marked conditions for the greater part of the year, especially after the first quarter. Fol- lowing the completion of Easter orders, unsatisfactory and fall contracts de- veloped late.” One of the features of the vear was the vogue for certain specialties in women's shoes. A phenomenal run on bright _colors, mostly in kid, was succeeded by a strong call for suede calf, etc., and all through the vear unusual styles, entirely in low cuts, prevailed. Men's « shoes ran mostly to staples, but the exceptionally mild fall was a factor in reducing demand for these good: In general,the footwear industry ex- Perienced " fower labor troubles in Foremost among the accomplish- ments of the New York curb market during the year 1923, has been the general “house cleaning.” The board of govenbrs of the Curb Market Asso- clation has strin- gently enforced the laws governing dealings in secu- ritles on this ex- change and has ‘worked tirelessly to rid the organi- zation of undesir- ables who were privileged,through membership or as- soclate miember- ship, to trade on the ' New - York Curb Market, Let it not be forgotten, however, that it is not the curb market alone that has been troubled with these undesirables, com- monly known as bucket shop oper- ators. Other prominent exchanges have been compelled to expel members who falled to conduct thelr business ac- cording to required rules and regula- tions. As a_matter of fact only two houses with direct membership on the curh have been compelled to close their doors in the last year. The regular quota is limited to 550 members, who operate under a consti- tution which provides maximum safe- guards for the investing public. In addition to the regular members there are some hundreds of associate mem- bers. This latter quota is composed largely of New York Stock Exchange members, who transact an immense business in curb market stocks. The demand for membership in the organ- ization is greater than at any pre- vious time. At the last sale ten seats on the curb exchange were pur- chased by men connected with stock exchange firms, and this is given as an example of the class of men who operate on this market. Curb on Seund Basls. Reviewing the year 1923, President Curtls stated that the New York Curb Market had placed itself on a sound basis and that the general house- cleaning is ndw beginning to show its benefits by the class of securities dealt in and by the large volume of business transacted. : Curb listing requirements are miore exacting and this has resulted in an spring demand was mainly | influx of the highest grade securities. The following is a comparison of the number of issues dealt in as,against those at the close of 1922:° Listed stocks, 286, against 222; unlisted stocks, 970, against 858; bonds, 185, against 143. The listing committee declined, to_accept ‘approximately fty issues of various companies, due to their failure to meet the requirements set down by this body. Included among these were various mining, in- dustrial and oil stocks. The nominal listing fee at the pres- ent time amounts to $200. but it is learned on good authority that the charge for admission of stocks to trading will be increased to $500 some time after the first of the yeaf. A clearing ~ouse similar 1o that of the New York Stock Exchange has been established and over 175 stocks are cleared daily. It has 'been re- ported that the formation of a New York curb exchange bank iy under serfous consideration. Such an organization would be of great benefit to traders interested in curb securities. Failure of the New York banks to accept various curb stocks as collateral for loans has been one of the biggest obstacles with which the association has had to contend. Acceptance of curb stocks as collateral for loans would go a long way toward bringing about a regular mareinal trading basis for those desfrous of dealing in this'man- ner. Evidence of the stability and worth of curb market stocks is supplied by the enormous number of sccurities which_have graduated to the New York Stock Exchange. Before being transferred spectacular advances were recorded in many of these issues. notably General Asphalt from 233% to 161%. Houston Oil from 123 to 172, Hupp Motors from 3. to 143 and In- ternational Mercantile Marine from less than 1 to 30. Standard Oil companies are an in- stance of the class of corporations whose securities are listed on this exchange. The curb has always been known as the home market of the Standard Olls. Despite the transter of several of these issues to the New York Stock Exchange, the majority remain and are dealt in actively from day to day There has been no limit to the spec- ulative and investment opportunities afforded those who were desirous of trading in curb securities during the last year. Price fluctuations have been wide and as the year draws to a close numerous stocks are substan- tially above what they were selling LOSSES THROUGH BUSINESS FAILURES, SR N SRSE P~ NN A\ [N N \ W A ) B S s S N I L T A RN W R SO ORI O N ) NG A (IR I R » T CE L R VIR SN BN R DT O X I S N SN N S NN N RN A N S A 2 > pper e usinci rasging. sihs ecent in 1915. In both- the wvolnt sinee 1878, The facts are from Tine, average of liabilities per firm in business-during each year, fanging aince 1910, from $04.31, the average for 1918, (o $320.09, the average |eflt business 1919, ] failures each year to number of eent from 38 per in 1910 to 1.33 per shews above ix the higbest of R. G, Dun & Co. ILESS WHEAT ACREAGE ‘Mncfion to Assure Against Over- production Advgmted in Letter to Representative Anderson. AvserT $.GATIEY Tieasurer’ = - at the outset. As an instance Schulte Retail Stores Corporation, which was dealt in on this market throughout the greater part of 1923, but of late transferred to the big board, from S8, where it was ing early last. May, to a high of 116%. Influences governing the oil trage situation have been an important fac- tor in the movement of curb stocks in that this group represents practically 35 per cent of the class of stocks traded in on this exchange. Oil com- panies during the last year have been faced with the serfous problem of overproduction. This has resulted in nu- merous price cuts throughout the year and has brought about sharp declines in foreign and domestic ol companies’ stocks. The peak of domestic produc- tion was reached during the week ended September 3, namely, 2,280,700 barrels dailv. But this situation gradually began 1o right iteelf andt as the year closes, the demand and | supply in this industry has drawn more ‘nto line. This has been reflected in the turn for the better during the last three months of the year, and the outlook for 1924 in all basic lines of industry is brighter than at any time during the past twelve months. The New York Curb Market really came into its own following the re- moval of its place of business from the open market, at the corner of Broad and Exchange place, to its magnificent quarters at 78 Trinity place, New York city, where it estab- lished itself on Monday, June 1, 1921, Year of Great Expanaion. In summing up the progress of this organization during the vear 1922 at- tention was called to its rapid expan- sion following immediately the com- mencement of Dbusiness in its. new quarters. At that time renewed en- thusiasm and confidence was born in people interested in the vast number of securities which are dealt in on the curb market. These investors and _speculators were given the same privileges en- joyed by traders in stocks and bonds listed on_the New York Stock Ex- change. The installation of a ticker service similar to that of the latter exchange is at the disposal of its customers so that transactions are recorded within less than a minute of the time of execution. Recently extension of thiis_ service to Boston, Philadelphia and other large western and middle western cities has been considered. The idea has materialized in Pittsburgh and Chicago with satisfactory results, ana it will not be iong before other large cities in this territory will have the benefits of the curb ticker. (Copyright, 1923.) I COOLIDGE INDORSES By the Associated Press. CHICAGO, - Decenibér 31.—Reduction of America’s wheat acreage to insure against over-production, is indorsed by President Coolidge in a letter made pub. lis here by the Wheat CouncH of the ' United States. E t The President's letter, addressed to | Revrmrcnuve Sydney Aniderson of Min- | nesota, president of the. Wheat Council, expressed the conviction that farmers would benefit by forming organizations and asgociations through which it would be possible for them to deal with the underlying * problems. of Iture. He expressed- the belief also that the movement to_increase .the demand for Wheat-food products, -would, result in much bénefit. “The. work of the Wheat' Council of the United has - interested me o ‘writing 8 pay tome 3 be- e 9 g ) leve a great pi benent fs likely to derive from it. :The effort, # an_ or- ganized and systematic way, to estab- lish such measure of control over the wheat acréage as will: measureably in- Eether o Do m”‘f% ey T to every important business, . excépt ulture, has :ndn‘omflm and associations thi ich it 5 possible to deal with-| such ly important fnatters. Quitc obviously the Dbusiness of agricultural production. would: benefit by uz-- to’ the ‘underlyi nef ical which it must always confront. proble “'It seems apparent, too, that much ben- hould come from an organized and eficlent move Lo d‘lhctm the demand for wheat produ O] 1l estab- lished methods of business exploitation 80 _successfully employed in marketing other _staples.” s | matter, 1924 Outlook Called Brigh t i YEAR'’S MARKETS MARKED BY SHARP VARIATIONS General ahd Nearly Inexplicable Decline Sets In Between Two Periods of Moderate Advancement. BY GEORGE T. HUGHES. The record of price fluctuations in the securitly markets of 1923 may be divided into three periods. During the first three months of the vear there was a continuation of the rise which had marked the closing months of 1922. The high level was reached in March. In the closing days of that month and all through April a large and general decline set in which, interrupted by moderate ral- lies, continued a'l through the sum- mer and fall until the last day of October, when there was a sud- den and spectac- ular turnabout. The Imm=diate oc- casion for the re- versal of genti- ment was the dec- laration by the United States Steel Corporation of an extra dividend on its comgmon stock accompanied by an uncxpectedly favorable earn- ings statemernt. Speculative ac- tivity for the rise has continued throughout the balance of the year, with railroad stocks and _bonds competing with industrials for mar- ket leadership. This latter develop- ment was based not simply on the im- proved financial position of the car- riers, for that had been evident for months, but rather upon confidence that the administration at Washing fon would insist wpon fair treatment for railroads and that threats 6f rad- ical action ‘in Congress would ne get beyond the stage of talk. Th brief, is the summary of a vear unusual interest. Decline Went Too F Looking back over the year, it is hard to see justification in the course of business and trade for the extreme fluctuations in securities. Doubtless the advance early in the year went farther than the commercial situation warranted, but it seems equally sure that the subsequent decline was car- ried too far as well. The reasons assigned for the specu- lative pessimism of the midyear are varied. They include advancing labor costs, which it was argued manufac- turers could not pass on to consumers in higher prices for finished gaods. and so must necessarily result in smaller profit margins. Predictlons of a buyer's strike similar to that of two years ago were freely made. April the Steel Corporation announced a higher wage scale for its employes. Later in the year the. twelve-hour day was abolished In the steel indus try and eight hours made the basi This, it was held, could not but ai fect adversely net income in the steel trade. In the textile industry also much ado was made over high labor costs, but the chief struggle came in the buflding trade end. For a time construction work was halted and financial institutions which make a business of loaning money for new projects withdrew from the marke But all this was temporary. and as the yvear ended the general wage level remained around the high point and the menace, if it was a menace, to general industrial prosperity from this source was forgotten. Low Farm Prices. Second to the matter of wages as an adverse factor, speculators put great emphasis on the prevailing low prices for agricultural products, not- ably wheat. It was repeatedly point- out that the price of wheat was fixed fn the world markets and that our farmers would have to take for thelr surplus what the worlg was willing to pay.in a year when supply was running ahead of demand. As far as it went this point was well taken. The farm price of wheat con- tinued below the cost of production up to the end of the year and the fa- vorite diversion of politicians and of agricultural economists was the de vising of a remedy. Various schemes! including price fixing the taking ove MR. HUGHES. . in of of the surplus by the government and | limiting future production were pro- posed. ~That the exclusively wheat farmer has had a bad year is not open to argument. His misfortunc has been reflected more or less in the earnings of the northwestern rall- roads. 7 There are twb considerations to be kept in mind, however. The first is that while the price of wheat Is, in- deed low, it has displaved a remark- able resisting power in the face of the statistical position. Part of this may be due to the expectation that some one of these relief plans al- ready referred to will be put in oper- ation and part may be due to the specylative support which is alwa: attracted to .a commodity selling below the cost of production. The other point which is vital in this connection is the small proportion of the farming community which is de- pendent entirely upon wheat. There has been no depression in corn and cotton has soared to sensational heights. Examination of the sales statistics of the mail order houses for the vear shows that the alleged lo: of buying power in the agricultural section has been greatly overesti- mated as o factor bearing upon the couptry’s economic position. Excess 0fl Supply. Over production in the oil industry was another condition which intensi- fled the pessimism of the midyear. The facts about the excess supply of oil are too well known to require discussion here. Suffice it to say. that for a time concern was freely ex- pressed 28 to the solvency of some of the smaller and weaker oil producers. At the close of the year, however, production has been falling off and the crisis appears to have passed. Oil stocks have begun to regain favor and as, is generally the case the stronger companies ‘appear to be bet- ter. intrenched than ever. Looking at the whole episode. calmy in_retrospect over production of oil, or under production either for that was never a barometer of the In | jmerce regards it | 31.+-Damage general state of trade. It was and Is a special case without significance outslde its own trade. It is unneces- sary to take up in detail the fluctu- ations in other commodities. The im- portant point is that all through the year retail consumption has been heavy and manufacturers and whole- salers have operated with the utmost caution, taking no chances on inflated inventories. Lesson of 1921. The truth of the matter is that neither business men nor speculators h: for- gotten the lesson of 1921. Even if they had been inclined so to do th onom- ists, professional and amateur, would not permit it. Probably never in the I tory of business have there been s many analyses of commercial and finan- cial conditions for the enlightenment, if not bewilderment, of the average busi- ness man From the Federal Reserve Bank and the statistical service of one of the largest universities down, to a_score or more of professionals who give their opinfon for a fee, there has rained a flood of advice, most of it based on the so-called cycle tieors. All the indicia of business and financial conditions wer« collated in the greatest profusion with the idea of forecasting the future. It was not surprising that the result wis to slow down both trade and specula tion. Now some of these services are very valuable, and properly used may render a real service. It is folly, how ever, to believe the: is anything exact or anything approaching exactness in these forecasts. If there were any in fallible signs of approaching prosperity or depression, and these signs were uni- versal terpreted, the resuit would be to dissipate the prosperity before it arrived and to modify the depression in advance. Situation Abroad. Even more remarkable than the attention paid to the factors already mentioned has been the lack of at tention accorded to the situation abroad. Only in the market for f eign bonds and in the foreign changes has there been any impor- tant reflection of the chaotic cond tions in Europe. The American se- curity markets have moved with a: eye single to dom ic affairs. It is not easy to explain this attitutde In part it has represented the con- viction that for the present, at least business here would run along about as usual no matter what was happen ing abroad. In one respect the un settlemdnt on the other side actually proved a stimulus to high grade in Vestment securiti One of the most conspicuous fea tures of the vear's trading in bonds was the demand from abroad, prin cipally from Holland, for raiiroad mortgages the quality of which could not be questioned. good deal o this buying is believed to have been for German account. It seemed as'if German capital rorized by the collapse of the and timorous even of the stability of the pound sterling, was taking refuge in obligations payable in dollars, and that return on the investment was of no importance compared with the in tense desire for absdlute saf Re peatedly during the year there would be an influx of buying orders of this kind, which kept the high-grade savings- bank railroad bonds selling on a 4% to 4% per cent basis. Cer- tainly there was no excuse in the money market for the prices at which these bonds sold curities _of slightly lower grade are also heHevojl to have been accumulated by British investors, although statistics on these matters wre totall ng. ~ The movement, howev was &0 prC nounced that the Sebretary of Com as explaining th continued excess of gold imports. Foreign Bond Market. Naturally enough. the markets fu: foretgn bomv- payable in dollars have responded = ctly to changes | political condition: on the other side The sharpest breuk in these secur jties came in late January and earl February, when the French irst in vaded the Ruhr. French bonds derlined to the low- est price on record and the mid-Fu Topean lssues went down in svm pathy. The sent rally carriec Qquotations up to the high of the yea in April. but in the late fall whe it appeared that there was dan B AP ik hetween France an Great Britain came a second drop, b not mearly as severe as in the firs instance. s th s year ¢ these ~foreign fairly stabilized. ments in foreizn fallen off spectacularly in 1923. According to the Department Commerce, in 1922 this country too foreign securitics amounting to $963.- 000,000, while the estimated total fo 1923, the official figures not bein available at thie writing, s only #1202 n0t open to debate that. th American investing public has littl confidence in foreign securities. (Copyright, 1923.) $300,000 DAMAGE RESULT OF DOUBLE TRAIN WRECK Passenger Engine Crashes Into Freight Cars Halted by Acci- ' dent—No One Injured. for American invest securities By the Associated Press. COLUMBIA CITY, Ind., ‘esz\{.mml at $300,000 was cauted by @ train wreck on the Penasylvanix lines near here last night, officials estimated today. The wreck curred when one of the trucks of a freight train buckled causing twenty cars loaded with meat and othe: foodstuffs, to Dile up. . Passengcr train No. 111 crashed into the wreck- age which was scattered in all direc tions. The passenger tri was trav eling at reduced speed and although the passengers and crew were badly shaken up, no one was injured. The wreck held up trafiic on th line_until noon yesterday, when th. tracks were cleared. Trains wer. routed over another line. Decembe abou double Checks Will Be Mailed November 29, 1924 JOIN OUR' CHRISTMAS SAVINGS CLUB $25 $50 $100 $250 for S0 M‘ ' $1.00 a week, . & week, $5.00 a week, 7 7% % 7 - Citizens Savings Bank 1336 New York Avenue - ?