New-York tribune., 1920-10-25


stock tended to strengthen the theory
that industrial securities have been
we'll liQuidated in recent months. It
does not follow that liquidation here
is complete, but there appears to be
good basis for the oft-repeated argu-
ment IN the Street these days that the
STOCK market has gone long ways in
discounting the present business
slump.
With the coming of November the
STOCK market will have rounded out
twelve months in which prices have
shown a declining tendency. Industrial
shares reached in November, 1919. tho
peak of the after-war speculative boom
The first big setback also occurred in
That month, and it was the forerunuer
OF the decline which establishes 1920
IN the history of speculative securities
as bear year. Many of the industrial
stocks to-day show declines from the
hlghs OF last year ranging from 80 to
loo points. The average price of
thirty industrial stocks has fallen moro
than 35 points.
The one bright spot in the securities
market at the moment, aside from the
Improvement in rail issues, is the per
sistcnt demand for prime investme mt
securities. New issues continue to be
taken by the investment public with
out hesitation, and old outstanding
bonds, including public utility issues,
as well as standard rail mortgages, are
eagerly sought. The Danish govern
ment $25,000,00O twenty-five wear 8
per cent loan Offering was oversub-
scribed last week within an hour after
the formal offering. The performance
IN this case nearly duplicated that in
the case Of the Norwegian government
offering OF few weeks ago, when sub
scrptions to a s2o,OOO,00o issue ran
we'll in excess of $1OO,0OO,O00. Within
The brief course of month three large
foreign government bond issues have
been absorbed by the American market
without apparently affecting its appe-
tlte for further offerings. This is q
sood omen. And it is important as in
dicating that this market will take for.
elgn securities if the "set-up" meets
tho fancy Of the American investor.
Since September offerings of new
securities have approximated $3.50. .0OO..
600 and additional operations are un-
der negotiation. Domestic corpora-
tons have been large sellers of new
security issues. Here is an extremely
important factor bearing upon the gen
eral credit situation. Most of the
large pieces of corporate financing re
Gently arranged have been to refund
oank loans. In other words the cor
porations have found it possible tt
transfer the burden from the banks te
the investor. By doing so they have
relieved the strain upon the banks b,
just SO much.
The government has been an impor.
tant element in the local money mar
ket during the last week. Withdraw
ais on government account have been
unusually large and have accounted in
measure for the temporary tightness
IN the call money situation at this
center. Toward the close of last week
III per cent rate for call money was
established. Generally speaking, how.
ever, the rate was lower and the re-
newal rate held steadily around 7 per
cent. The banking view is that money
will gradually work into an easier DO
sition as time goes on and il is be-
lleved that the banks are amply pre-
pared to finance business during the
present readjustment AS one of the
largest commercial bankers in the
country points out, this process will
require the employment of large
volume of credit. Inventories cannot
be disposed of abruptly. In many lines
owing to general indisposition to buy
liquidation must be effected very grad
ually. and in the meanwhile they must
be financed. In the long run, however,
the effect of the downward price move