New-York tribune., 1919-07-14
The Markets

Speculative interest in the stock mar
ket continued at high pitch last week.
In its main characteristics the market
movement was similar to what Wall
Street has been accustomed to since
the rise started. Industrial shares, feat
high record levels. The average price
of thirty standard industrial stocks
touched 112.40. This was an advance
of about 32 points from the low level
of early in the year. The public con-
tinucd heavy buyer of stocks. Call
money scared to 20 per cent on Mon
day and held at high rates throughout
the first half Of the weak. But even
such extraordinary rates for Stock Ex-
change money did not discourage
operations for the advance. In the lat
ter half of the week when money eased
it looked for time as if the whole
market might go into q sharp decline.
Saturday, however, saw the develop
ment Of another broad and active and
| rising market which carried the indus
trials and many Of the rails close to
the tops touched on the rise Of Monday
and Tuesday. Monday, whi4i. marked
the resumption of trading after a three
days suspension of Stock s;xchange
| activities, furnished market in which
transactions were in excess Of two mil
lion shares. The remaining sessions of
the week saw dealings running around
100000 shares.
1t was evident from the action of
stocks last week that the folk who are
making this market do not believe
that the top of the movement has yet
been seen. This was demonstrated by
every time prices yielded. In fact, it
was the underlying strength of the
market that was most impressive. An
interesting feature of the trading was
the continued activity in the railroad
shares, the whole group improving,
with the lower-priced rails leading the
way.
There were three outstanding de-
velopments last week with an impor-
tant bearing on stock market values.
First was the recurrence of the money.
stringency. This was unexpected, for 1T
had been generally supposed that the
heavy corporate requirements around
July had been taken care of and that
the strain on banking resources aris-
ing therefrom had passed The Satur-
day bank statement of week ago,
however, indicated that reserves had
loan account had undergone a sub
stantial expansion. This situation
necessitated the calling of loans by
the banks on Monday shooting the call
money rate to per cent late in the
day. On Tuesday the renewal rates
were 8 and IL per cent, and the high
rates of the day were Is and II per
cent. AS the week progressed the situ-
alton improved again, however, rates
and tx on Friday and closing at 51a
and g.
The money stringency was hardly a
constructive influence on market values,
yet stock prices did not decline, in
fact, the whole market displayed sur
prising frmness and strength. Tight
money did demonstrate to Wall Street,
however, that the supply Of credit for
stock market purposes is none too
large and also that the banks are dis
posed to take care of commercial and
governmental needs first and let the
stock market take what is left. The
Federal Reserve Board, in third state
ment bearing on the general credit situ-
alton, went SO far as to find out that
such furries as have occurred in rates
for Stock Exchange money are inevi-
table so long as present methods of
financing and settling speculative ac-
counts are persisted in, adding that it
is not the function of the Treasury
nor of the Federal Reserve banks nor
the banking institutions of the country
to provide cheap money for specula-
ton. At the close of the week there
was enough money to meet the require
ments of the market, but no substantial
surplus. Indications are that there will
be no easing of stock market money to
speak Of until the securities market
slows down or there has been some
liquidation Of outstanding speculative
accounts since the demands on the
money market from this time until into
the winter are likely to prove very
heavy. The moving Of the record
breaking crops will, for one thing,
prove heavy burden to the banks,
while the arranging of large foreign
credits will be added to the strain.
The effect of the lifting Of the
blockade against Germany, announced
last week, which allows the resump-
ton of commercial intercourse with
that country, was not discernible in
the stock market, although this was
the most important development of the
week. To q large extent it had prob
ably been discontinued by the rise
that had already taken place in the
securities markets since last February.
1T still, however, will remain as a
powerful continuing factor Of a con-
structive character. No one can tell
as yet what the restoration of trade