New-York tribune., 1919-02-24

With sharp advances, succeeded
at times by almost equally sharp
declines, the stock market ended
the week with substantial gains.
1t is true that the largest of these
gains were in special stocks, none
of which are among the recognized
market leaders," but the fact re-
mains that such violent gains were
possible, and that, after all, the
market leaders did advance. When
the standard market issues lag be-
hind that is usually the sign of an
artificial and manipulated market,
but the present market may be
termed unique in this respect, that
the Interpretation at this time lies
in industrial conditions.
The three groups which include
the so-called standard" stocks, or
market leaders," are the railroads,
the steel companies and the copper
companies. The railroads are now
surrounded by political doubt. Vio-
lent and continuous reductions have
been made in the price of copper
without uncovering a. market, and
at least a six months supply is ac-
cumulated. And simply because
the steel companies have not made
sharp reductions from their war
time prices it is assumed that they
will have to do so. The outlook for
these three great industries is un-
favorable or uncertain. But there
is something to be optimistic about
in nearly every other industry-in
automobiles, in tires, in rubber, in
oil, in tobacco and even in the trac-
tions. And beneath all this is the
fact that the stock market has been
declining for nearly four months,
and has risen for only two weeks
Profit-taking may come at times,
and short sellers may become ag-
gressive, but these are never in
themselves reasons for doubling
the validity Of a market, nor do they
indicate that rise has. been un-
warranted.
The main influence on the money
market of the week was the finan-
cial operations of the government.
The continual calls upon the banks
to take Treasury certificates of in
debtedness begin gradually to tie
up banking funds, and leave a
smaller surplus for other channels.
A further issue was announced last |
week Of $50O,oOO,00O or more of
these certificates, bearing A. u per
cent interest, to date from Feb
ruary 27. They are payable July
20. When the banks take these
certificates they do not pay the gov
ernment in cash, but simply enter
a deposit for the amount in their
books. The government draws upon
these deposits as it needs them. In
the past fortnight the government
has been making heavy Withdrawals,
now on this bank and now on that,
so that the banks have become un-
usually cautious. 1t has been these
withdrawals, more than increased |
activity in the stock market, which |
has led to the high call rate, at
times of per cent. This is partly
verified by the fact that the call
rate dropped to ~ per cent on
Friday, though that day was the
most active of the week.
The call rate has been blamed
for killing the weeks bank accept
ance market, and for lessening the
demand for commercial paper, but |
the call rate in itself was only re-
suit Of these withdrawals Of funds,
and 80 were conditions in other
money markets. Higher call rates
and more active stock market
have naturally caused an increase
in the demand by brokers for loans
lasting from sixty to ninety days,
which can be had at from 81 to
5 II per cent.
Overshadowing all other develop
ments in the investment market of |
the past week was the announce
ment of the action of the WAYS and