New-York tribune., 1920-12-20

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A radical change has come quickly
1t has affected the status of many
companies and has been discounted in
part by more than year of falling
security prices. When reports of in
come are made public stockholders are
often shocked, and the emotion is fre-
quently reflected by severe break in
the market. The drastic character of
the swings illustrates the desirability
of continuous, instead of spasmodic,
knowledge on the part Of stockholders
regarding the affairs of the corporation
in which they are interested. Enter
prises that publish absolutely no state
ment of earnings have no right to ask
the public to purchase their securities
Corporations whose stocks are listed
are required to publish periodical
statements. Instead of annual and
semi-annual statements monthly re-
ports are more to be desired To do
so perhaps requires unusual accounting
efforts, but some corporations each
month are demonstrating the feasibil-
ity of this system, which tends to put
all stockholders on an equal footing
Such policy of unremitting publicity
would make the task Of the purveyor
~of malicious rumors almost insuperable.
As guide to the future, the fuctua-
tions In the stock market last week
were Of little value. They added to the
confusion instead Of effacing it. Prices
at the beginning Of the week ebbed
with sensational velocity and quickly
recovered on Tuesday. Then on the
next two days, with the zest of unus-
ual activity over, the market lapsed
into dullness, gradually losing the re-
traced ground. Finally, a spectacular
break in the sugar stocks was sufficient
to drag the average price of thirty
representative industrial stocks below
Mondays level to the lowest price of
the year. After much ado at the mar
ketplsce, the net result of the weeks
trading was insignificant, as fuctua-
tions tended to offset one another.
The ticker revealed that those who
attributed much of the urgency of the
selling on Monday and on the last few
days of the previous week to the rush
OF individuals and corporations to turn
securities into cash with which to pay
the last installment on their taxes on
December Is were correct. The taxes
due were against income and profits
earned during 19l9-the year of wide
spread prosperity-and the date of pay
ment happened to fall on day many
months later, after earnings had dwin-
c.ed and in many instances borrowing
capacity had been exhausted. The ex-
cited tossing of stocks on the market
place during the last few days before
the due date represented final effort
of those who had been holding back in
the hope that the Bureau Of Internal
Revenue would defer the time of pay
ment, in view Of the prevailing condi-
tions Of industry in the credit market.
But since the Treasury needs the funds
currently, and is In fact compelled to
borrow against taxes in advance, no
! b
moval Of this hope broke the dam which
had been checking the stream of Offer
| ings.
After selling for this particular pur-
pose subsided the trend of prices
turned rapidly, quickly rebounding
The upturn was facilitated by the de-
cision Of many who had gone short of
stocks in order to profit from the de-
cline to establish their gains by cover
ing. The recovery was so sharp that
it induced new short selling, and with
trading on a diminished scale and
liquidation playing relatively smaller
part than earlier in the week, the mar
ket drifted back to fresh low levels.
When the rate of sterling bills on
London rose above 1854 last week. it
had recovered fully 20 cents to the