New-York tribune., 1919-11-15
Railroad Stocks
Are Prominent I'm
J An Orderly Market
Banks Favor Loans OH Mixed
Collateral - General Adj
vance Scored Loss of
Gold Affects Credit

Although large volume OF business
was transacted on the New York Stock
Exchange yesterday, the market was
orderly and, in contrast with the abrupt
and startling fluctuations of the two
preceding sessions, seemed dull in the
extreme. Prices moved within COM
parativeiy narrow ranges and trading
was. for the most part. confined to the
exchange of counters between profess
sional traders. There was, however,
some buying by outside spectators
who thought the decline had carried
too far and a little by the inevitable
bargain hunters" Business of this
character was chiefly in railroad stocks
gains in some issues being quite sub
stantiaI
The rails were given good deal
more attention than for some time past.
This, doubtless. was owing partly to
certainty that the government will not
relinquish control Of the carriers with
out providing for their imnre diate fu-
ture by extension of the guarantee pc
riod and partly to the growing convic-
tion that the railroad problem, will be
dealt with in an equitable manner.
More important than this. however
as far as the effects on the days trad
ing were concerned, was that the banks
began to discriminate in favor of rail
road collateral. Ii was learned that
some brokers had been quietly in
formed that they would find it easier
to negotiate loans. and could get a
lower rate, on mixed collateral than on
all-industrials collateral. This amount
ed to unofficial restoration of the old
differential between mixed and all in
dustrial loans. The result naturally
hot Ayic hot
clients to put at least part of their
funds in the railroad stocks. Should
this situation continue it would not be
surprising if the rails were to show
relatively greater strength than the in
dustrials.
The renewal rate for calf money was
fixed at Ia per cent, and this rate was
maintained through most of the ses-
sion. There was a slight decline in the
late afternoon, but most loans were
made at the opening rate. 1t is ap-
parent that the banks have no inten-
tion of letting money become cheap
enough to encourage resumption Of
wild speculation. Any repetition Of the
excited advances such as had been wit
messed prior to the recent decline al
most certainly would be the signal for
the calling of loans and another rapid
advance in the rate.
In connection Win the STRAINED cred1t
position, now fortunately relieved by
the heavy liquidation of Wednesday,
news that large amounts of gold are
going to the Far East is significant
The country's stock of money gold has
shrunk something like S300,000,000 in
the last year; and the movement this
month has been, according to well-in-
formed bankers, greater than at any
time since restrictions on exports Of
the metal were removed The Far East
which is taking the gold, is able to
command very large amount of the
metal, it being estimated by Japanese
bankers that their country alone has
balances here in one form or another
mostly in liquid form-of no less than
500,000,O00. In practice S1,000,000 Of
gold serves as the basis for $4,000, 600
of credit. The turn of the tide would
indicate therefore that the process Of
def1ation is under way