New-York tribune., 1920-08-30
Trade and Finance
Developments of the Week and
Their Bearing on
the Outlook

the AT cnt'On of the financial world and
DEVELOPMENTS having to ca with the
underlying credit situation are likely
to be intensely interesting and have
an extremely important bearing upon
the financial markets during the next
few weeks. The movements in stock
prices last week demonstrated in in
teresting fashion the degree to which
the market is dominated by the credit
situation. Wall Street pro eeded with
it's speculative operations on the as
sumption that credit conditions have
undergone Improvement during recent
weeks and that the outlook Is much
more promising than a month ago.
This feeling of quiet confidence in the
ability of the bankers to solve the
pressing problems of the present read
justment period, to which has been
added the heavy burden of the sea-
sonal demands for credit for crop
moving purposes, seemed plainly to
be back Of the better tone displayed
throughout the week by the industrial
group of stocks. 1t was obvious at the
same time that this particular section
of the market had been oversold by
over-zealous bears and was therefore
in splendid position to make a quick
response to favorable developments.
Stocks rose buoyantly for time and
even though the gains were not held
to the end of the week the market
/ A,,N
clined traders, for it offered sturdy
resistance to the pressure Of bear Of
ferings and maintained its strength
even when call money went through a
series of fluctuations. which finally
carried the loaning rate to tho highest
point Of the month.
1t is needless to say that one week
OF rising prices docs not make q bull
market, and that therefore the sub
stantial recovery registered by many
stocks should not be accepted as indi-
eating a definite turn for the better.
1t would be indeed too much to hope
at this time of business unsettlement
a revival of active speculation for the
rise. To attempt to stage a bull cam
palgn under present conditions would
be merely inviting trouble. For were
wall Street to try any such man.
euver it would quickly bring down
the wrath Of the high banking powers
IN the form of q Tightening of the
money bags upon which the stock mar
ket is dependent for its support. How
ever, 1t is not probable that the bank.
would interfere with further ou;et
recovery in stocks, in view of the fact
that a great deal Of new and important
financing must be arranged in the
course of the next few months. So
far as the general speculative market
IS concerned, however, the best that
can be expected apparently is quiet
trading, with alternating advances and
declines and no very definite trend un
til the air has cleared of manv of the
current uncertainties.
by lar the most striking feature of
the security market last week was the
strength of the railway issues. Rail-
road bonds and stocks both moved IN
"alo IN response to broadening de-
mand that seemed to grow increasingly
conadent as the week progressed. The
ouylng OF the rail stocks represented
something more substantial than the
1epurchases Of speculative short sell
lers. 1T rather had the appearance Of
accumulation by confident investors
VINO have come to believe that by virtue
OF recent developments, principally the
liberal advances granted the roads bv
the interstate Commerce Commission
ana now effective for the first time.
the railroad outlook is better than at
any time in several years. II remo;ns
Oh course, to be seen how the roads
are to fare individually under the new
SET OF conditions: but. generally speak
lng' IL can be said without fear of
contradiction that the carriers as
whole have entered upon a period of
increasing revenues which cannot help
but have beneficial effect upon rail
road credit. Six months from now the
complexion Of RAILROAD operating state
ments ought to be changed completely
for the better.
The common banking view of the
credit situation these days seems to
be that there has been real and sub-
stantial improvement and that it is
now possible for the first time to look
forward to the critical period of the
fall season with equanimity. What
the bankers have been saying with re-
gard to credit betterment has been
suostantiated by the latest statement
OF the Federal Reserve Board. which
calls attention to the fact that credit
expansion has been checked bv the
measures taken to accomplish this end.
the improvement in transportation has
helped IN relieving the strain on hank
INK credit by moving goods to market
and thus releasing frozen credits to
the amount of hundreds of m;),;one
or dollars. AS a result of this and
the liquidation that is steadily tak;no
place In the commodity marke+s o,d