New-York tribune., 1919-07-07


equalled anything that was seen dur
ing the excited speculation of a month
or two ago.
The week in the stock market was
interesting in Chat it saw return of
public participation in stocks on an
active scale After the drastic clean
ing out sustained in June after the
long upswing from early February, the
public became more of a spectator than
participant and it looked as if the
stock market would relapse into a
narrow trading affair. In fact, the
predictions of the majority Of Wall
Street observers were to the effect
that speculation for the advance had
received serious check from the June
setback. Last weeks extraordinary
revival of stock market activity came
therefore as q surprise to most OBJ
servers, and the fact that the profess
sicnal element has sold stocks for the
fall in anticipation of further de-
cline helped to accelerate the upturn
when prices started to advance. At the
close Of the week it looked as if the
rise had been so rapid as to weaken
the technical position and to make the
industrial list extremely vulnerable to
any unfavorable news Developments
over the triple holiday.
The Federal Reserve Board, in it's
statement for July, took occasion to
sound another note Of warning against
undue speculation, asserting that "the
possibility that speculation may be
carried too far and may exert an in
furious influence, aided and furthered
by the existence of free credit and
speculative tendencies, appears as the
principal offsetting influence in the
situation" But, curiously enough, the
bulletin was used in the stock market
as the week closed as an argument on
which to base higher stock prices, for
it was optimistic in the extreme as
regards the business outlook for the
country, predicting hia business in
almost all lines and pointing to the
promise of bumper crops. The funda
mentals on which the present specula
tion is based are, of course, the begin
nings of huge foreign and domestic
business, prospects of still higher
prices for basic commodities, like steel.
copper. leather, ETC., and enormously
valuable crops. The question that con-
fronts the stock market is whether
these factors have not already been
discounted by the rise in the indus
trial list. At the close of the week the
average of thirty industrial stocks
stood at 1929, the highest in the
history of the market. This compared
with 1920 year ago, and low of
1920 for the current year. In other
words the average price of the thirty
industrials has risen approximately 33
points from the low Of the year.
The banks were burdened last week
with the heavy July l corporate re-
quirements. which, according to a con-
servative estimate, amounted to at
least s3oo,ooo,o00. These demands.
coming into money market already in
q frightened condition, naturally made
for higher rates for call money, and
1t occasioned little surprise when the
call rates at the exchange went to 8
and 10 per cent early in the week.
There were heavy Withdrawals made
on local banks by institutions in the
interior and the combined demands i'm
posed a severe strain temporarily on
banking resources. Toward the end of
the week the situation became easier as
the funds temporarily withdrawn for
corporate uses came back into the
banks. On Thursday the call monev
market dropped back to per cent
level, and it looked as if the monev
squeeze was over for the time being.
Comm mercial borrowers found m