New-York tribune., 1919-12-30
Stock Prices Hold
Well in Spite of
High Money Rate
Market Shows Strong Re.
sistance to Pressure as
Call Loan Rate Jumps
to Is Per Cent

The stock market, confronted with
the most severe money squeeze ex
perienced since a 80 per cent rate
caused wide open break in the latter
part OF November. yesterday exhibited
surprising strength. Stocks forced on
the market by the scarcity of funds
were so we'll taken that at the close
losses were mostly fractional and not
few issues showed small gains.
The market was half an hour late in
getting under way, owing to the trac-
ton tie-up. At 10 o'clock, when the
opening gong sounded, less than 100
OF the l,loo members of the exchange
were present and as result the Board
ing until 1880 at which time enough
members were on hand to warrant the
resumption Of business.
Opening prices did not differ greatly
from the final quotations Saturday. and
for time there was no decided move
ment IN either direction The general
disposition of the trading element was
TO await the opening OF the money
market before taking position. When
TINS occurred and the renewal rate was
fixed at II per cent, the highest since
the November furry stocks we're sold
rather heavily for time and prices
receded sharply. The movement has
not carried far, however. when enough
support to check the decline appeared.
AS the rate for demand loans ad-
vanced by steps until at . o'clock the
highest price of the day. 25 per cent,
was reached, pressure increased, but
even then the demand for stocks was
almost large enough to absorb offer
lngs at prevailing prices. At one time
offerings of money were NIL while the
demand was exceptionally large.
Buying orders apparently came
chiefly from spectators who expect
easier money after the first of the
month and from those who had previ
ously sold stocks in order to establish
losses for income tax purposes. There
was evidence that stocks were. on the
whole, IN strong hands. Signs of sell
ing by frightened holders such as were
Witnessed IN the November money
squeeze were conspicuously absent.
Easing in the call loan rate to 90 per
cent i'll the last half hour caused rally
averaging about point in the more
active stocks, but the rate jumped to
20 per cent again just before the mar
ket closed and prices were going down
at the end.
The statement of the local Federal
Reserve bank, showing a ratio of total
reserves to net deposit and Federal Re
serve note ilaOllltles OF 40 per cent.
against 446 per cent week before.
furnished the explanation for the tight
ness of money. Banks called loans
freely and brokers found it difficult 70
replace them. Lenders were reluctant
to renew maturing time loans, and this
added to the demand for call money.
lntimation that another increase in the
feulScount rates on commercial naper
was under consideration by the Fede raj
Reserve Board was also q factor
Bankers say that the attempt of the
Federal Reserve Board to reduce specu-
latlve loans has not met with much
success thus far. Expansion has been
checked owing to the uncertainty gen
Grated by the boards attitude, but the
total of Stock Exchange loans outstand-
ing has not been materially changed.
There has been considerable shifting Of
loans to outside institutions, but this
has not bettered the credit situation.
Bankers say, in fact, that commercial
borrowers have been hurt quite as much
as stock market borrowers by the
boards policy.
Trading in the bond market con-
tlnued on a broad scale but the price
trend was irregular. fractions were
mostly weak.