Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-08-09
FRESH LIQUIDATION
IN STOCK MARKET.
Bears Make Successful At
tacks on Rails and Indus
triaIs-SterIing Lower.
BY STUART p. WEST.


markets had left off on Saturday.
There was nothing in the week end
bank statements that counted much
one way or the other, although they
were encouraging rather than other
wise.
Neither was there anything I'M
favorable in the course of the money
market. Call money renewed at Z
per cent and was freely supplied at that
figure all day.
But sterling exchange, which had
got UP as high as 1853 on Friday, was
quoted at the opening of the market
this morning at 3.6Ola, and this was
enough to encourage d violent drive
at the share list as trading began.
1t is entirely probable that the
calling OF loans from weakened pools
and individual operators would have
kept on regardless of the foreign
news. Consequently it would be
of this mornings weakness to the
refusal of the Moscow government to
agree Immediately to the armiStice
proposal of Great Britain.
Even at the worst it could not be
said that there were any indications
of France sending an expeditionary
force into Poland and Great Britain
renewing the blockade of the Baltic
and Black sea ports. The drop of &
cents in sterling from the Saturday
final was sharp enough. to De sure,
but it still left the rate nearly 5 cents
in the pound above last week S low.
A Natural Reaction.
In other words. the decline in ster-
as simple reaction resulting from
fresh pressure of commercial bills
after 15-cent recovery.
The continental exchanges were all
off similarly. but foreign bonds were
very little changed, and Royal Dutch,
which is now the accepted measure
of London speculative sentiment, was
one OF the strongest stocks in the
market.
1t was true that the Saturday bank
statements did not reveal any i'm
provement in the actual credit position
But there was an important negative
gain in the fact that the banks were
able to handle a further large demand
from the crop moving regions without
any loss to speak of in the general
reserve ratio.
The effectiveness with which the re-
serve system is functioning in get
ting ready for the harvest moving
several weeks now.
Again last week the regional dis
tricts which are in the strongest po-
sition were shown lending freely to
the west and south, where the banks
are getting ready to finance the crops.
loans are relatively small and reserves
high were taking over discounts from
the federal reserve institutions in the
agricultural regions.
On the other hand New York and
Chicago took back some of their ac-
ceptances which the week previous
had been shifted to the banks at Bos-
ton and Cleveland. Here there is Of
fered a practical series of examples of
the mobilization of credit contem-
plated by the federal reserve act.
The main point is not that there
should have been further expansion
in bank loans and circulation. for this
was inevitable with the harvest move
ment coming on.
The chief consideration is that an
other week has passed. during which
preparations for the extra autumn de-
mands have been in full swing with
out the twelve federal reserve banks
as a whole suffering any loss. and
that such preparations should have
been under way for nearly a month
now and yet the federal reserve
hanks ratio Of reserve should remain
at A, which is almost up to the top
of the year.
Not a Pessimfstic Fact.
1t is impossible for anybody but the
most prejudiced to interpret these ac-
complishments pessimistically. In fact,
last weeks bank report, like those OF the
week before, support the recent opti-
mistic references by the head of the
Federal Reserve BBoard and by the con-
troller Of the currency and are most en-
couraging proof that the federal reserve
system is doing what was expected of it
and is successfully meeting the strain.
The Bond Market.
The sharp reaction in the foreign
exchanges. following upon the rather
disquieting Polish news over The
week end, afforded quite a test for
the market in foreign government
bonds. 1t was even clearer than it
had been before that if foreign bank
ers had foreseen at the outcome of
the Polish crisis a campaign of in
PREVENTION that would involve an
other great war expenditure and a
further huge addition to European
war debts. this would have certainly
appeared in the market for existing
government issues.
AS it was, the changes in this de-
partment were of very little conse-
quence. The United Kingdom 5As
Of 1887 were off half point to 85h
making a total decline of a point
from the middle of last week. but
this was hardly a loss of any great
The city OF Paris per cent. which
are one of the representative French
issues, were half point lower, at 81
but on the other hand the Swiss gov
eminent IS were practically un-
changed at 102A, the Belgian gov
eminent IS Of 1925 were the same as
they were Saturday at 81 and the
Belgian 7hs did not break through
last weeks low of 97h.
The uncertainty caused by the polit-
ical developments had some effect in
diminishing activity in the general
bond list, but it had no. effect upon
prices. Here and there. as among
sues. there were some slight losses
Atchison General BIS, one of the typi-
cal bonds of the highest class
changed hands at 75b. The Louis
vile Is made new high at 102. On
the other hand. Chicago and North
western Is dipped under par again.
Another Blue Monday.
For the ninth or tenth Monday ir
succession the market has showed
that the trader who sold stocks
short on Saturday could have COW
cred at profit at the beginning OF
the new week. Some traders who
have been playing this System
have reaped such big profits that they
are continuing to sell short and in
some instances declare that they are
short of certain stocks for invest
ment."
Baldwin Locomotive.
The bear party continued it's at
tack on Baldwin Locomotive today
and carried it down to a new low
record. Baldwin recently reported
that 1t has secured very large order
from the Polish government for loco
motives and the situation in that
country was such as to cause the feal
that this order would be Cancelled.
Some Recovery.
The afternoon recovery was helped
by the better tone in the exchanges
sterling rebounding cents from thu