THE DOMINATING FACTORS.
I suggest that in any consideration of the possibilities for the current half-year too much stress Should not be laid upon the mere rally which has taken place in prices during the last ten days. That rise, however justified, has in the main been due to the closing of bear positions, a marking up of stocks with little business taking place, and to speculative purchases by professional operators in anticipation of a public demand which at present has not thoroughly materialized. That does not say, however, that prospects may not have brightened, but it is the merit of the dominating factors themselves which should receive chief consideration.
Among the many influences responsible for the depres- si3n of the past six months were the serious financial situa- tion in Germany, the prospect of a German Moratorium in Reparation payments, an unsatisfactory financial situa- tion in Austria and some other European countries, the financial crisis in Australia, the unrest in India, the Russian Soviet menace, and last but not least the position of the National finances at home and the general trend of Socialistic legislation. These factors, it must be remem- bered, have operated separately and also collectively and cumulatively, producing a lack of confidence, both local and international, a fall in prices both of securities and commodities, and thus an atmosphere of depression which in itself has caused securities to fall in wholesale fashion quite irrespective of intrinsic merits. Let us now see how far these factors have been changed or weakened by the events of the past ten days.
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