Current Situation

Prophets of future tendencies in business, and particularly those practical seers who attempt to cash their foreknowledge in the stock market, have been considerably bewildered at the outlook during recent weeks. On the one hand, the ordinary signs of approaching depression, such as declining iron production, and falling stock prices and interest rates, are apparent to all. On the other hand, business leaders talk optimistically, merchandising is very heavy and profitable, the railroads are getting some fat around their bones; worst of all, the stock market refuses to decline.

The inconclusiveness of the stock market has led some bankers and manufacturers to declare that it is no longer a reliable barometer to future business. The same opinion, incidentally, was frequently expressed during the prophetic decline in prices which occurred in 1920.

It may be, however, that the stock market is now, as upon former occasions, a better index to the future than the postprandial discourses of many of its critics. The largely featureless stock market of the past few weeks may prove next Spring to have reflected a period of duller but largely painless business conditions. But by that time the public who watch stock prices will be more interested in their bearing on the Fall of 1924 than upon their forecasting accuracy this Autumn.

Money has been perceptibly easier. Ordinarily this fact would possess considerable significance as to next Spring's business. With our excessive gold supply, however, it is safe to assume only that the declining interest rate should mean rising bond prices.