The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-10-20
INVESTMENT VIEWS
AND THE OUTLOOK
Conservative Optimism Is Key
note of Brokers' Stock
Market Letters.
URGE MODERATE BUYING
Writers More Than Usual Tell
Of Possibilities In Certain
Security Issues.
URGE MODERATE BUYING

Conservative optimism is the keynote
of a majority OF this weeks batch Of
stock market letters and, with allow
ances for occasional setbacks, most
houses counsel moderate purchases.
Those letters, more than usual, are de-
voted to outlining possibilities for rises
or declines In individual issues. their
writer's giving more attention than has
been their custom to analyses Of the
market position of stocks more or less
prominent in the last week or two.
Merrill, Lynch q Co. say 1.-THE market
this last week has been held in check
by the high money rate. although on
Friday the rate ran down to per cent.
This caused uncertainty, as a good many
traders were scared as they remembered
the effect of the high money rate we had
In August. The market is still q trad
ing affain with an upward tendency, and
II the news Is cheerful this coming week
we ought to sec a pretty broad market"
Block, Maloney & Co. say: During
the second half of the week stocks have
given a very good account of themselves
and many of them ended with substan-
tial gains. On Thursday we called at
tention to the fact that the skies are
clearing. that signing of the peace treaty
by the United States appears to be sp-
probably nearer and that there are sig
nificant signs that the labor heads will
adopt more conservative policy. The
developments at the Industrial confer
ence. to be sure, are slow, but labor Ia
less pugnacious and evidently fears to
lose the confidence of the public. We
are conservatively bullish, but we would
allow for occasional setbacks In stocks.
These give good chances to buy"
Knauth. Nachod & Kuhne say: "The
rise In call money at this season of the
year Is not surprising in view OF the
fact that Eastern banks are seeking to
strengthen their position, while interior
funds are well occupied at home In NOV
ing crops and adjusting loans. The sup
ply Of credit necessarily does not spread
out as far at this time OF the year as
Il, dDes earlier In the autumn, but tss
situation as to money has become bet
ter and from this time forward should
show q considerable Improvement. This
Improvement Furthermore will be mate
rally assisted by the declining tendency
In governmental expeditures in liquida.
ton of war costs. October Is expected
to show q contraction of close to $780,.
00O,000 In these expeditures, as com
pared with October. 1918. For this rea-
son, II for no other, the money situation
should improve"
Josephthal & Co. say: I'VE look for
ward to a continuation of speciality
movements, but feel that highly specula .
tive issues as well as stocks which
have shown considerable enhancement
of late should be left alone. Standard
stocks. such as United States Steel.
American international Corporation,
leading coppers and rails deserve atten-
ton at prevailing prices"
Richardson, Hill & Co. say: "As the
Industrial list exhausts its possibilities
of price adjustment to existing condi-
tons speculation will be forced into
other channels. but this stage mas not
yet been reached. There are still latent
possibilities in the steel group. for in
stance, which the restoration of normal
labor conditions will emphasize. and
should the Supreme Court declare stock
dividends to be exempt from taxation
the decision would have a potent effect
on a wide variety of industrial shares.
The greatly extended loan accounts of
the metropolitan bangs suggest the ad-
visibility OF conservative security oeai-
ings, but reported signs that the major
upward movement in stocks has cul-
minated are to us unconvincing.
Wrenn Bros. & Co. say: 'The short
age of loanable funds upon which we
buoyant market often seemed to war
rant resulted in a sharp break early this
week. Call money went to Is per cent.
and large amounts were loaned between
8 and IL per cent. Furthermore, these
rates reflect the true monetary position
of the United States at the present
time. The fact that call money Is much
higher than time money. commercial
paper and acceptances casts no doubt
upon the genuineness of the rates for
loans On the contrary. 1t in
dicates that advances will follow In the
rates for other loans In the order Just
mentioned, for It 10 the surplus Of loan
able funds that Is put out on call, and
on this account call rates are the first
to show changes in the money market.
Because OF shortage of funds the banks
during the last three weeks have been
heavily with the Federal
Reserve banks cash reserves of all our
banks taken as q whole have fallen 10
the lowest level OF recent years, and
loans have expanded more and more as
with either cash or deposits.
IL is the financing of the crop movement
and the autumn trade that is imposing
the special burden upon the money mar
ket, and this financing will probably
not reach its climax until the middle or
last of next month The crop movement
Is two or three weeks behind hand-so
that the maximum movement should &C.
cur this year in November instead Of
October. It became clear some months
ago that bank funds were inadequate
for the financing of bull movement
and now the question is arising whether
they are even sufficient to prevent o.