New-York tribune., 1919-10-27


role in shaping the course Of prices
than at any time since early last sum-
mer. Professionals, however, still
dominated the market and initiated
most of the wild movements in prices.
There was a most crratic movement in
the steel shares for a time, with Re-
public Steel and Lackawanna Steel ris-
ing more than 15 points within few
hours as the result of manipulation,
aided by powerful buying from outside
I sources. Such violent advances natur-
ally invited selling and were followed
by almost equally violent declines. In
terest in railway shares revived bit,
but the movement in this department
lacked the vigor of the industrials for
the reason that the speculative and in
vestment public is not disposed to In
crease commitments to any large ex-
tent until more definite steps are taken
toward solving the urgent problems Of
railroad control and railroad credit.
which are intimately bound together
the irregular movement of industrial
shares toward the end of the week was
not surprising in view of the serious
ness of the labor situation, for it must
be admitted that the prospects of a
strike Of the bitumnous miners sug-
gcsts unpleasant possibilities in the
way of q complete tie-up of industry
~ i1iSh pcth Oi lIc advance IN
industrial shares reached on Wednes-
day saw the average price of thirty
industrial shares at 1880, which was
some points above the top Of last
June. 1t compared with low for
1919 of 1920, making the net advance
from the bottom of last January of
slightly more than 40 points. This is
the highest level for the industrials
in the history of the stock market.
Improvement IN the local banking
position was clearly reflected last week
IN the pronounced easing in the Stock
Exchange money market where bor-
rowers found an abundant supply Of
credit at reasonable rates. Relief from
the stringency, which has been some
thing Of deterrent factor in the
speculative securities market since the
latter part of September, came sudden
ly when least expected. After renewals
of call loans had been negotiated at
the end of the preceding week at 10
per cent, rate abnormally high and
only equaled two or three times be-
fore this year, the market opened with
IN 8 per cent renewal on Monday and
then steadily grew easier until re-
newais were made on Friday last at
s per cent. Loans were freely made
during the course Of the week at A 12
per cent. Indications are that funds
transferred to the interior by the
banks in order to take care of the
heavy demands of the crop moving sea-
son are beginning to filter back to this
center. Moreover, the drain on local
banks caused by the abnormally large
payments between October l and Is for
corporate and governmental purposes
has not only let up but what is equally
important money taken out of the
market at that time is also beginning
to come back to the natural channels.
It would appear from existing condi-
tions that fair degree of ease may be
looked for in the call money market
money market, not so sensitive as call,
continues on 51s to per cent basis,
with borrowers finding little difficulty
in meeting their needs.
Domestic offerings of new securities
continues on a large scale. Hundreds
of new issues, for the most part in
dustrial preferred stocks, have been
brought in the course of the last few
months. SO far they appear to have
been fairly we'll taken, although the
test of the permanency of their dis
trbution with investors will not come
I until later. Since January / approx
mately S650,000,0OO of new preferred
stock issues have been foatcd for
financing expansions, improvements
and for providing industrial working
capital. The success of the majority
| Of these offerings has been striking, ir
| view of the recurring periods of tight
| money. 1t only goes to show that {
huge amount of capital awaits invest
| ment. Recent preferred issues, many
| c /, IL, @cl l,,, Il
! gin of earnings under present condl
tons in industry, have borne interes
rates ranging from 7 to 8 per cent
whereas, the general run of investment
bonds are selling in the market t
| yield ga to 6 per cent.
i By far the most interesting devel
Il opment in the investment market il
Il months was the unexpected announce
ment last week of a new British gov
Il ernment loan Offering to American in
vestors. The issue, for which subscrip
tions are being received by country
wide banking syndicate, consists o
Il 5250000 900 of 5la per cent bonds il
two classes-one running for thre
years and one for ten years, both con
vcrtible into British war bonds at
fixed rate of exchange Of $4.30 to tn
pound. The Offering price for the ne'
Il securities makes the income yiel
| something more than per cent, whic
/ alone would make the notes attractive
l The added feature of conversion, whic
/ practically amounts to a call on ster
ling exchange at fixed rate over
period of nearly ten years in the cas-
Of the longer maturity, offers the pos
sbility of substantial speculative prof
it's in the event that sterling exchang
4 undergoes improvement, as may wei
I be expected. The conversion privileg
! makes the new issue one of the mos
attractive foreign loans ever offered il
/ this market in the opinion of invest
ment bankers. Success of the Brts
loan is likely to be followed by othc
~ foreign offerings, and bankers sug
gcsted last week that it's ready ah
; sorption may mean an early reviva
1 Of general plan for taking care o
II the whole international credit situa
IL ton.