Evening star., 1920-03-22
WILD ACTION WITH
BIG PRICE CHANGES
By STUART y. WEST.
Special Correspondent of The Star.

main AOudy TtCtlNtu Il ITcSn
impulse from the federal reserve re-
ports of Saturday showing both in the
New York district and the country as
- whole continued Improvement in
The banking position. The important
part was that this improvement was
brought about by the first very large
'urtailment that has yet occurred in
discounts secured by other than war
paper. that is in loans of the COM
mercial type.
1t is the beginning of this liquida
ton which the markets have so long
been looking for and have so long
been disappointed about. Now that it
has come. it is of far more conse-
quence than the fact that the gold
Withdrawals for South America,
which have now been suspended. We're
having their belated effect upon the
federal reserve bank return of Sat
urday and were therefore preventing
more of reserve ratio increase.
Dehcit Only Temporary.
The deficit reported by the New
York clearing house institutions.
being due to the operations of the
tax period, and therefore of only tenn
porary significance. was ignored alto
gether in the calculations of the day
1t had no effect either on the stock
market or on the money market; the
call loan renewal remained at . per
cent. Wall street went about its
business more confident than ever
that the turning point in the credit
situation was reached three weeks
ago. and that the Improvement which
then set IN will from now on be slow
perhaps but continuous.
The day commenced with another
sensational whirl in General Motors
carrying the stock well above 400
This tremendous squeezing of the
shorts ceased when the stock en-
change came out with ruling that
the new shares at the ratio of ten to
one would Immediately become good
delivery for the old
shorts Get Hard Beating.
But in the meantime the terrible
punishment inflicted on the General
Motor shorts had completely shaken
the confidence of short sellers in other
directions. and when one after another
the other high priced industrials were
taken up IL was an easy matter to
drive the short interest into hurried
retreat.
Baldwin Locomotive. Republic Iron
and Steel, Bethlehem Is. in all OF
which there was a newly created short
account to work up on. were rushed
up in succession to new high prices
for the present movement. All other
steeis, including Steel Common and
all the other equipments. We're like
wise very strong. The other high
priced motors and motor accessory
stocks rose in the wake of General
Motors.
Special Buying Movements.
At various stages special buying
movements were apparent in the food
stocks unTer the lead of Corn Prod
ucts. in International Paper. the tire
stocks. American Sumatra Retail
stores and large number of lesser
speciaIties.
Mexican Petroleum was the leader
of the oils. shooting across 200 on
Urgent buying. Texas Company. in
which a stock dividend continues to
be talked OF. was a close second
The great strength in these higher
priced and better established oils made
the slugg ishnesS in the low priced
members of the group, such as Trans
painfully evident than ever.
Record for General MOtotrs.
With the old General Motors stock
up to 400. where il was soon after
the opening. there was no longer any
doubt about the squeeze of shorts hav-
ing attained the proportions of real
corner. The stock was up 30 points
from where il started Saturday
and il was considerably ahead of the
new shares. The idea was. of course.
tnattthe exchange of the high-priced ,
into the low-priced stock would be de-
layed and that ten shares of the lat
ter would not be good delivery right
away for one share of the former.
II was this trick situation which
the General Motors crowd were
counting upon to accomplish their
purpose. When. however. the stock ex-
they did about half-past Ia that the
new stock would be a COOL delivery
on the basis OF 10 for |. the corner
was abruptly broken and General Mo-
tors fell within half hour more than
40 points from its top.
Western Pacific an Garner.
For some time past, it has been ap-
parent that an accumulation was go
ing on in the Western Pacific stocks.
particularly the common. These stocks
have broken away from the rest of
the rails and have shown pro-
noSpced inclination to move indc
pendently. thereby indicating a spe-
cial reason which does not apply to
the railway group in general What
this reason is. is quite apparent from
the most superficial analysis of the
companys financial position. Western
Pacifc has first of all it's claim
against the Denver and Rio Grande
"n the old bond guarantee defaulted
10y the after. But in addition its
own earnings as they have been rum
ming during the last year make the
present selling price of the stock ap-
pear more conservative.
The road is one of those which
earned far more than the government
guaranty. Consequently. it is one
which will be benefited greatly by the
resumption of private operation.
Middle states OIL.
A most unusual story is being ad-
Nanced in Wall street to explain the
f4iiure of Middle States Oil TO show
any recuperation following the heavy
selling movement last week IN which
the entire outstanding capital stock
was turned over. In quarters which
have been very correct on the stock
in the past, 1T is said that the insiders
recently found themselves in position
where they thought il advisable to dis
pose of some OF the stock bought on
the way down from 40.
This stock, it is said, was opiioned
off at 80 to a speculative group, who
were TO effect it's distribution. AS
the story is told, none of this stock
vas distributed. the people holding
III options to the stock instead of
tax ng a short position from 81 down.
BY III wing their hand in this manner
they nave the stock owned by the
inside sewed UP and are i'll posi-
tion to cover their shorts at 80 in the
event that it should be impossible to
depress the price further.
Copper Dividend Talk
With the change for the better in
the copper industry which took place
al the close Of last week. there was
much speculation today as TO what
would be done at the dividend meet
ings of Anaconda and Inspiration this
week AT the last meetings of these
two companies the regular dividends
were declared. although II was be-
lieyed at the time that they had to
he cut into surplus to paw them. 1t is
felt that there will be no cut tomor-
row by Anaconda and Inspiration will