New-York tribune., 1920-05-19
Stagnation in
Stock Market as
i. S. Bonds Drop
Heavy Outpouring of Gov
ernment Issues Outstand.
ing Development; Deals
Smallest for Over a Year

Rapidly falling prices for United
States government war bonds far over
shadowed all other developments In the
financial markets yesterday. A steady
stream of offerings Of the Liberty
loan and Victory note issues poured
into the market all day long, repre-
senting in large measure selling by
business and industrial interests who
have been forced to liquidate to meet
the exigencies of the badly strained
! credit situation, as we'll as selling by
individuals who have become disturbed
over the swift drop in those securities
Dumping of the several Liberty Loan
and Victory bond issues in such an
unprecedented manner tended to stife
operations In the speculative securi
ties market, where business was re-
duced to a barest minimum. 1t has
been great many months since the
Street has experienced such dull
session in stocks. Indeed one would
have to go back more than a year to
the period just prior to the beginning
of the 1919 bull campaign to find such
NttSI SldSUaClOn IN STOCKS. Dealings
aggregated 341 800 shares.
Traders were not bothered BY tight
money, for there seemed to be an ade-
quate supply at 8 per cent after renew
ais had been made at per cent The
trading element plainly was not in a
mood to push matters In a speculative
way in either direction, the attitude
on all sides being one of hesitance.
No doubt the insistent offerings Of
Liberty Bonds had something to sdo
with this lack of interest. 1t was con-
sldered in some quarters quite re-
markable circumstance and an indica-
ton of a strong market position that
stocks did not decline in the face of
the extra ordinary developments in the
bond market Here and there a few
stocks displayed quiet strength as the
result of operations by venturesome
pools. In the main, however, the mar
ket left off about where it started.
The drop in the government bonds,
however necessary it may be for cor
porations and individuals to sell at
this time, is unfortunate for many
reasons and only serves to add to the
unsettlement in financial circles
Every one of course realizes that the
decline of these bonds-a number of
them are now selling at a discount Of
more than Is per CENTS no reflection
upon their intrinsic merits or upon
the credit of the United States, but is
rather due to changed conditions in
the investment market and to the cur
rent credit strain. Neve ertheless, the
effect of such steady and drastic
fall in the price Of prime securities of
this character cannot help but prove
disturbing, particularly in the case of
the great mass of people who patrioti
cally subscribed to the several war
loans and who now find themselves con-
fronted with a considerable loss on
their investment. While the decline
may go further before the pressure Of
selling lifts, the bonds at present
levels offer the investor an opportunity
TO purchase the safest security in the
world to-day or an exceedingly at
tr&ctive basis.
The Street awaited with much inter
est the outcome of the conference at
Washington, where the bankers and
the Reserve Board are discussing the
credit problems OF the day. Advices
from the capital after the close of the
market expressed confidence on the
part of members of the advisory coun-
Gil Of the board that q continuation
of the present course Of action in cur
failing credit expansion would result
in bringing about a more satisfactory
credit situation within a month or two.
Local bankers, however, were not so
sanguine.
There is growing belief in Wall
Street circles that the Reserve Board
may let up somewhat in its campaign
for defation in view of current devel-
opments.