New-York tribune., 1919-07-21
The Markets

ne week In W ali street saw con-
tinuation Of big, broad markets, with
no signs of any dimuniton Of buying
power. Speculative activity in stocks
became violent at times There were
sensational advances in several indus
trial issues, notably Crucible Steel.
That stock jumped IL points in sim
gle day and fuctuated violently. Deal
ings kept we'll above the million and a
half share market, and the high rate of
activity, maintained for SO long a peri
Cd without q break, caused the Stock
Exchange authorities to close the mar
ket on Saturday to allow the clerical
force of the Street to rest from it's
! labors.
Speculation for the advance carried
the average price Of thirty standard
industrial shares to a new high record
of 11440. Toward the end of the week
sentiment became somewhat bearish
as result Of the huge expansion in
! Stock Exchange loans that has taken
place since early in the year, and sell
ing of stocks followed, resulting in
ment did not go far and was halted by
spirited rally Friday afternoon.
The stock market is not a Wall
Street affair. There is widespread
participation by the public, the buying
orders coming from all over the coun-
try. The present so-called bull market
is in it's sixth month, Despite moder-
ate reactions, the average price of thir-
ty standard industrial stocks has risen
approximately 80 points during that
period. Individual stocks have gone
up IN market value anywhere from 80
to $50 per cent under the stimulating
influence of a rapid recovery and in
dustry. How much longer will the
market continue in Its present state :?
1t is lnconceivable that prices can go
on advancing indefinitely, as they have
since early February. The situation
undoubtedly calls for conservatism
Further curtailment of credit supplies
may be employed before many weeks to
apply restraint
There has been for several weeks
and still is serious shortage of bank
ing credit. The stock market loan ac-
count has expanded from $65O,O0O, 900
to more than $1,50O,00OO00 in the
course Of the last six months. A point
has been reached apparently where fur
ther expansion can take place only at
the expense Of productive enterprise.
That is the explanation of the current
frmness of Stock Exchange money,
with rates on call loans ranging from
6 to 20 per cent in recent weeks. Last
week call rates ranged from to 10 per
cent. But there was no increase in the
iloH 10
industrial stocks as collateral. And
with crop demands increasing and in
dications~ that Europe will borrow
heavily here, there is little prospect of
easier stock market money In view of
this condition and as the Federal Re-
serve Board has made it plain that
legitimate business must be provided
with all the credit it requires to finance
an enormous turnover, it is not i'm
probable that return to semi of
fetal control of the money market may
be ordered.
Sterling exchange rates dropped to
an extreme low Of $4.26A, making the
discount on the English pound about
l2 per cent. The decline in sterling,
unless checked may in the long run
have serious effect upon American
export business, since it tends to in
crease the cost of American goods to
/ the English importer. 1t is expected,
however, that steps will be taken to
remedy the situation by the extension
Of long term credits to British in
terests. Meanwhile, plans for granting
large credits to European countries, in
cluding Germany and France, are max
ing progress. Germany already has
made overtures here for credits, the
proceeds to be used for the purchase of
American cotton, copper and other es-
sentlal commodities. Swiss interests
during the week practically completed
negotiations for a loan of $4,000, 600
in this market. Before the end of the
year the aggregate of such credits will
likely run into big figures. The gen.
eral programme for international re-
construction finance which the Ameri-
can bankers are considering is said tc
involve the extension of credits to for.
eign countries aggregating as much al
90 000 O00 000