Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-12-21
FOREIGN EXCHANGE
RAL[YENCOURAGES
Unexpected Monetary Ease
Also Brings Hopeful Feeling
to Market Circles.

NEW YORK, December 20 tby the
Associated Press).-Specific reasons
for more hopeful feeling manifested
in stock market circles this week
were furnished chiefly by the rally
in foreign exchange and greater mon
etary ease than was expected at this
period of the year.
Recovery in exchange. notably the
British rate, was not due, so far as
could be learned, to any definite for
ward step in the international credit
situation. but rather to a logical re-
bound from acute and unreasoninS
pressure.
Relaxation in the money market
again applied only to daily or call
loans. Time funds remained firm at
recent quotations, with greater scare
1ty OF offerings on further reserve
Withdrawals by out-of-town institu-
lions.
Huge Sums Shifted.
The most impressive feature of the
local financial situation was the shift
ing of huge sums to meet income tax
! returns and other federal require
! ments. This was accomplished with
scarcely ripple on the surface Of
the money market.
The advance in stocks which mark
ed the weeks later and more active
operations was ascribed less to actual
demand than to tardy recognition by
the shorts that the floating supply of
popular issues had steadily dimin-
iShed.
Another factor which accelerated
the rise was the increased inquiry for
steel and iron products. Leading mills
are weeks behind in untitled tonnage
and the first quarter of 1920 is ex-
rected to witness an impressive re-
yival of the country's foremost in
dustry.
Improvement in copper and kindred
| metal shares also proceeded from bet
| ter trade conditions, accompanied by
higher prices, while the advance in
oils. motors and affiliated issues was
reminiscent at times of the October
November boom.
Rails repeated their familiar move-
| ments of recent weeks. backing and
| sion and developments dealing with
| their return to private ownership be-
came more confusing and uncertain.
Yesterdays Market.
Brighter prospects for railroad Leg
| isla ton and another substantial rise
| in British exchange caused moderate
covering Of short contracts in the
course Of today's brief stock market
| session.
| The further recovery Of interna-
| tional remittances was based upon
| the recommendation of the Secretary
of the Treasury to Congress. urging
| that credits be advanced to the more
needy European countries.
Early gains of one to three points
| in rails, oils, steels and various other
| industrials and specialties were held
only in part however. the market
easing in the later dealings. with an
| irregular tone at the close. Sales
amounted to 100000 shares.
Liberty Bonds steady.
| Trading in bonds was relatively
more active than the turnover in
| stocks. Several of the recently heavy
| speculative rails. including Pennsyl-
| vania general AVS and Baltimore and
Ohio convertible AVS. were strong.
Liberty and foreign war issues were
| steady. Total sales (par valued ag-
| gregated $12,300,000. Old United
States bonds were unchanged on call
| during the week.
A decrease of slightly more than
$40, 500, 900 in actual reserves in clear
| ing house banks created deficit in
| total excess reserves of about S12,-
$4,000. This is the first deficit re-
ported since the latter part of Sep
| TENDER, when reserves fell almost
s100,O00.000 under legal require
ments.
Countrywide bank clearings again
broke all previous records for this
period of the year, exceeding 1918 by
about 40 per cent and 1917 by almost
So per cent. Much of the increase. il
was pointed out, resulted from the
higher level of commodity prices over
the previous two years.