New-York tribune., 1919-12-08
In Wall Street /

ment Of Southern Pacific, which
jumped nearly Is points following
announcement Of the governments
decision to abandon the oil land suit,
the stock market last week was a
colorless affair, as Is commonly the
case when trading narrows down
chiefly to the exchange Of counters
between professional spectators.
The proceedings were enlivened at
times by pool operations, but appar-
emily the results were not encourage
ing, and the attempt to revive public
interest in the so-called "specialties"
was abandoned for the time being.
1t is true that some brokers report
ed more orders from outside sources,
but the volume was not important
enough nor the demand sufficiently
we'll sustained to warrant the hope
cherished by some that an important
revival Of speculation was in pros
pect for the near future. While
there was some improvement in
prices and sentiment generally was
more cheerful, the general opinion
at the end Of the week was that
narrow trading market was the best
that could be expected during the re-
mainder Of the year.
But, even If the market gave no
evidence Of another boom, it demon
strated at least that the technical
position was sound. Confronted
with news which ordinarily would
have brought about drastic price de-
clines, the market actually ad-
vanced. It is now clear not only
that the weak spots have been elimi-
mated, but that substantial short
interest has been built up. This was
the important sustaining factor last
week. When those who had prev
ously sold short in expectation Of
decline found that prices showed
great resistance to selling pressure
induced by unfavorable develop
ments in the coal strike and further
declines in foreign exchanges, they
began to cover. Their efforts to do
so forced prices substantially high
er, and as prices went up buying
for long account developed in con-
siderable volume. There was not a
little profit-taking toward the close
Of the week, however. But q good
many observers hold the opinion
that the market is still in an over
sold condition.
1t seems to be the consensus of
opinion in Wall Street that the mar
ket will improve after the turn of
the year. For one thing, it is be-
lieved that the railroad problem will
have been solved by that time, or at
least that measures will have been
taken which will protect the carriers
and enable them to go ahead with
necessary work pending a satisfac-
tory solution. For another, it is
hoped that with January 1 disburse-
ments out Of the way money will be
80 plentiful for a time that specula-
tion may proceed on broader scale
without danger Of restrictive action
on the part of the banking authori-
ties. This may prove to be the case,
but it is by no means certainty.
There are no signs Of abatement in
the volume Of domestic business, and
with commodity prices and wages
still tending to rise the demand for
commercial credit is expanding rath-
er than decreasing. Moreover, the
country's stock of money gold, on
which credit is based, is steadily
diminishing. The bulk of our pro-
duction is going into the industrial
arts, while imports are small
since our debtors are unable to
spare much-and exports to South
America and the Far East, where
we owe large balances, are increas-
ing. Moreover, the credit situation
with respect to our export trade is
growing more acute. The market
here is flooded with the bills of Eu-
ropean purchasers OF American
goods, so that the value of Euro
pean moneys in terms of dollars
shrinks constantly. It is obvious
that this condition cannot continue
much longer without causing a
| grave slump in the volume of our
sales abroad. The only remedy is
to provide adequate credits. With
that still to be done, it is hardly
likely that the Federal Reserve
Board would permit any great ex-
pansion Of loans for speculative pur.
poses.
With the world demand for goods
already far in excess Of the supply
the shortage Of bituminous coal
threatens further curtailment Of
productive activity. How serious