A Lesson Learned?

That the lesson of 1920 has been remembered, if not thoroughly learned, by the average American business man has been obvious from recent occurrences in the financial markets. The economic signs of a boom have continued, yet tempered by a spirit of caution. Not merely bankers, but leaders in mercantile circles too, are advising against recklessness. The speculating public has grown cautious in the Stock and Cotton Exchanges. In general, Mr. Babbitt is willing to put up enough additional chips to draw to a pair of treys, but he isn't "raising" any one while he holds merely a bobtailed flush. The Reserve rate is unchanged, despite Wall Street predictions of an advance. Evidence of increasing firmness for money was seen in the establishment of a 5 1/2% rate for time loans. It is also generally believed that member banks are becoming fairly well "loaned up," and will soon have recourse to the Reserve banks to a greater extent. Hitherto they have been able to avoid rediscounting by selling the large amounts of bonds accumulated during 1921- 1922--this has been an important factor in the decline of Liberty Bonds to a new low price for this year. Taking it as a whole, however, the money market shows no signs of the much-dreaded "secondary inflation," although everywhere revealing greater activity and expansion in trade. The halting irregularity of stock prices also suggests that the financial community feels that the high level recently attained had somewhat over-discounted the admittedly bright trade outlook. The Daily Trade Service points out that since 1921 automobile stocks have advanced 80%; automobile accessories, 100%; coals, 50%; coppers, 72%; electrical machineries. 53%; railroad equipments, 52%; farm machineries, 23%; railroads, 27%; public utilities, 55%; tobaccos, 32%; sugars, 80%; steels, 48%. These figures make it evident that the stock market can well afford to halt now, before a slower and more cautious advance is resumed.