The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-06-18
FINANCIAL NEWS
AND COMMENT
Stocks Recover Substantially
and Standard List Is
Higher at Close,
MONEY Is AGAIN NORMAL
Sharpest Rallies Are in Issues
Which Had Lost Most In
Recent Declines.

Another sharp decline In the stock
market during the morning hours yes
terday apparently marked the final
stage, for the time being at least. of the
fall if prices caused by the rise In the
money market. At any rate, the charac-
ter of the trading on the Stock Exchange
thereafter underwent a change and for
the first time since the setback began
last Thursday a substantial recovery set
In and the standard list actually closed
higher on the day. The upward move
ment was undoubtedly due to short COW
ering and to the mechanics of the mar
ket [; for the investment buying. while
4 was still in evidence. was hardly of
sufficient proportions to bring about such
a recovery as was experienced In the
final hour. Nevertheless II indicated a
temporary sold out condition and very
substantial improvement in speculative
sentiment as a result of the return Of
the money situation to normal, that Is
to say. in so far as 1t could be in so
short a time.
The whole trouble with the market. as
on the preceding day. appeared to lie In
the money situation. As soon as the
trend in this connection had definitely
turned easier, in the afternoon there was
a distinct Improvement not only in spec
ulativezsentiment, but in security prices
az we'll. Whether or not the improve
ment in the money situation Is perma-
nent remains to be seen. but the indica-
tons were at any rate that the worst
had been passed last night. The decline
which has been going on for the last
week or so appeared to have cleaned out
the weakly held accounts and reduced
borrowings considerably. In addition TO
this reason for easier speculative money,
III - Aoo 10 tn
de btedness fell due yesterday. which i'm
r1ediately tended to correct the money
stringency. The offerings Of money yes
terday afternoon were not as large as
might have been expected in view of the
large amount of cash which the banks
had returned TO them, either from the
Federal Reserve Bank, as a result OF
the redistribution OF the tax payments.
or as a result of the money paid by the
Government to the banks In the matter
Of retiring the certificates of indebted
rcss. But it was sufficient to bring the
rate on call loans ftom an opening OF
at the closing, which was virtually
normal.
With sentiment thus encouraged by
the return OF money conditions TO normal
Il was not surprising that there should
have been a sharp recovery at the clos
ing. especially in view of the series OF
declining markets which have been ex-
perienced. The sharpest rallies, OF
course, took place in those stocks which
have lost most in the recent declines and
which at the same time had proved to be
the most important targets of the bearish
speculation. Southern Pacific. Steel COM
mon and other standard issues all shared
in the recovery, as well as the highly
speculative specialties. but the most I'M
portant improvements were recorded in
such issues as Royal Dutch, Studebaker,
General Motors, American Wooden and
others In addition to all this the mar
ket had as a stimulant what appeared
to be a renewal of the pool operations In
United States Rubber This stock led
the whole market in the matter OF ad-
vances in the last hour. Although the
rally appeared to be entirely too fast 10
be maintained, and brokerage sentiment
was doubtful whether or not sufficient
buying power could be rallied to continue
the advance, the market closed strong
without any indication of a renewal OF
the declining movement Nevertheless
there was a distinct slowing down In
transactions, and It appeared s though
| the market was definitely drifting into a
| trading affair, for the time being at least
Naturally there was much gratifca'
/ ton In the nndnclat WIN lHe
return of money to lower levels in the
| afternoon. and at the same time II
brought out lot of criticism Of the
methods used by those in control OF the
money strings. This was directed more
at the Federal Reserve Board than II
was at New York bankers. for thu
reason that this body had acted so soor
after the warning. 1t was believed thai
the board should have taken into consid
Grafton the fact that the public was II
the market and that the public has no
had sufficient education to understand
the Significance of these warnings. Till
criticism came primarily. however. from
Western sources rather than from pro
| fessional Wall Street. for 1t had beer
pretty we'll understood here for SOM
time previous to the decline that thu
present pace of speculation was not u
the liking OF the banking fraternity. TIT
foreign exchange market was weaker
Sterling was off, francs were weaker
and so were lire. Tho only really stront
spot in this market. in fact. was pesetas
| which showed n substantial gain.