The sun., 1919-08-07
FINANCIAL NEWS
AND COMMENT
Market Receivers 2 to 6 Points,
Wiping Out Many Traces
of Recent Break.
INDUSTRIALS GO HIGHER
Rails Make Moderate Rallies
Francs Drop to New Low
Record at 7.72.
INDUSTRIALs GO HIGHER

The market rebounded yesterday to the
extent of two to six points. wiping out
many of the traces OF the break at the
beginning OF the week and suggesting a
rocoil from over extended pessimiEn.
Nevertheless It remains to be seen
whether the continued and rapid recov-
cry In stocks can be maintained In the
face Of factors which were ignored
entirely during the five hours OF
trading. For q day or 80 the rail-
way situation may be forgotten. the
labor unrest dismissed from consid-
GRAFTON by the SPECTATORS and a super
ficial decline IN call money rates re-
garded as an indication of real better
ment in the money and credit situation,
but none OF these factors Is negligible
in any sense OF tho word. From the
start of trading. when bulls seized upon
the results of the United States Cham
Der of Commerce referendum on senti-
ment regarding Government ownership
as good omen. to the closing gong
tho investment and speculative attitude
was constructive, the buying compris-
ing both the covering of recent specula-
tive sales and new purchases In antici-
patton Of a further rise. Not only the
impression. that the Bolshevist moves of
the railway brotherhoods would be
oheckmated by Congress- but the state
ment Of the head of one Of the brother
hoods that there would be no strike for
two or three months or until Congress
and the President had time to act to
ameliorate the labor unrest were re-
garded as reassuring. Too much i'm
portance. however. should not be at
tached to the constructive character OF
yesterdays demonstration.
The entire list showed a better tone
at the opening and the recovery in prices
progressed under the leadership of the
ruhbers. the tobaccos and the steel
shares. At the best price Of the day,
107A. United States Steel common was
nearly points above the weeks low
There was at least one concerted at
tempt to find a weak spot in the market,
but the consistent advances disclosed
the strength in the markets technical
position and the shorts ran to cover
when the call loan rates eased below
6 per cent.
The best prices of the day were
reached in the final half hour when
United States Rubber was forced up
above 100 for net gain OF 14% points
and other active industrials ended the
day well above Tuesdays final. Most
OF the rail stocks made a moderate re-
covery, none Of the active ones gaining
as much as 2 points and Atchison show
Ing net loss Of Y OF a point on the
day. 1t was clear that the pessimism
had been excessive. so far as the in
dustrials were concerned, but the rail-
road situation is still muddled and the
outlook is not sufficiently favorable to
permit bullish operations of magnitude.
AS result In part of the attraction of
idle funds from the interior, the call loan
supply was considerably greater than the
demand, the repeated offerings forcing
the rate down officially to 3h per cent,
With one loan reported at 3 per cent.
Curiously enough at the time that call
loan funds were almost unlendable a
brokerage house, with credit second to
none, negotiated a time loan, getting 25
per cent. of what 1t needed and paying s
per cent. for the four months accom-
mediation. That incident furnishes a real
test Of the money and credit situation
which confronts the Stock Exchange
houses and suggests that much freer Of
ferings of time money must appear be-
fore anything but temporary betterment
In the supply Of credit for specula-
two purposes can be seen. Psycholog-
ically, however. the drop in call money
rates influenced a more liberal sentiment
regarding stock purchases.
Outside of the rally in all of the &C.
tive stocks, with the single exception of
Atchison. the chief feature in the fnan-
cial world yesterday was the sensational
break in exchange on Europe. The fall
in rates carried sterling down to $3.50
to the pound and francs down to 7.72
francs to the dollar, new low record in
the case of exchange on Paris and
close to the low record in the case
OF exchange on London. There were
similar but less expensive movements
in all of the other Continental ex-
changes An Unexpectedly large volume
of drafts on Europe, which had been
withheld In the hope of an improvement
In rates. was marketed yesterday, and
as no offset had developed. weakness was
the Inevitable result.