The Washington herald., 1920-05-30
WALL STREET
FEELS BETTER
Bankers Believe Process OF
Business DeAation Has
Reached Orderly Stage.
FEAR BULL MARKET
Big Advance in Stocks
Would Necessitate High
Call Rates.
FEAR BULL MARKET

Sentiment generally in Wall
Street near the close of the week
was Of decidedly more favorable
character. bankers taking the posi-
tion that the lam" under whicn
the country as a whole was suffer-
ing in the past four or five weeks
had reached the peak and from
now on developments will be of a
favorable character. Money is ex-
pected to remain stiff. but hopes
are entertained that there will be
a rather Ireer movement in the
market and that sufficient funds
will be available to meet all ordi-
nary demands for stock market
purposes. The attitude of the
banking community has been such
as to result in a narrowing down
of credit extensions for credit pur-
poses not regarded as absolutely
essential and this already has met
with beneficial results.
The improvement in Liberty
bonds during the week was accept
ed as a favorable indication, it be-
ing recognized that at the lower
levels established on the decline of
a week ago these issues were so
attractive as to have resulted IN
their purchase by many individuals,
institutions and insurance COM
panies. Therefore, these issues
have been gradually going from
weaker to stronger hands and the
outlook in this respect is viewed
with a greater degree of confidence
than has been entertained in sew
eral weeks
The action of such stocks as
United States Steel common, Bald
win Locomotive. Republic Iron and
Steel. American Locomotive and
American Car and Foundry
throughout the week was looked
upon as demonstrating the strong
position intrinsically enjoyed by
these corporations and it was said
that the buying of these stocks at
the lower levels established has
been what may be regarded as OF
the very best character.
While it is not unlikely that re-
Cessions from the higher levels es-
tablished this week may take place
during the coming. week. it is felt
in the best market quarters that
prices as a whole will show an up
ward trend over the next several
weeks. This should not be inter-
preted as indicating that bankers
expect a big bull market because
such a development is the farthest
from their desires at the moment.
owing to the present nervous credit
situation. They say that a big
broad buying movement of stocks
that might force prices up from 10
to Is points within a comparatively
short time would be one of the
most unfavorable happenings that
could be looked for because it
would Immediately necessitate the
boosting of money rates to a point
which might again disturb the
financial situation generally.
The commercial situation appears
to be clearing as a result of this
action of the banks in Tightening
the extension of credits for mercan-
tile pursuits and confinfng ad-
vances to activities of a strictly
essential character. This has in
stilled in the minds of those en-
gagged in commercial activities the
necessity for liquidating large in
yentories which are being held for
higher prices-in many instances
rank profiteering. The selling wave
of commodities has been country
wide in Importance and far-reach-
ing in its effect. The action of the
banks in curtailing credit has been
in Difference to the wishes of the
Federal Reserve authorities at
Washington who had strongly rec
commended such a procedure. Ex-
pectations are that there will be a
free supply of money up until the
time of the crop moving period, bur
there unquestionably will be no
slackening or easement in rates
charged for funds. This means
that the banking community not
only here but elsewhere throughout
the country will not countenance
further expansion of commercial
operations at least until such time
as there has been a drastic scaling
down of stocks of goods now on
hand.