The Washington herald., 1920-07-13
STOCKSSHOW
SHARPDECLINE
Show Of Strength at Open
ing But Close Is Weak
Though Active.
GOOD CROPS FACTOR
Differences Prevail Among
Professional Element Re-
garding Future Money.
GOOD CROPS FACTOR

New York. July 12-L"Eg stocks
otd last Friday unGer cover Of
manipulated advance CT Reading
made their influence felt in Wall
Street today when the purchasers
Fad to pay for them. Prices de-
cllned everywhere. The market
opered with a show Cf str tIength.
with Reading at the head OF tie
railroad list. Iudustrials faded from
tie opening. In the afternoon even
the railroads yielded and the mar
ket closed weak and active. with
material net losses eYCrywhere.
This setback &c the stock mar
ket is due to reasons we'll known.
The most important enc is tie IA
thar crops are going tC be so biz
that severe credit strain this
fall Is certain. The banks know
IN 5 and are warning their peo-
pic out Of the n aIket. tellins them
to take advantage Cf every thow
OF strenS t" get cash. The credit
strain will be severe chiefly be-
cause OF the congestion on the 'ail-
roads. The congestion or the rail-
roads Is sdue 20 the neglect OF the
Interstate Commerce Commission 70
advance rates so as to enable the
Railroads to make terms with Ia
hor. This congestion Is causing
! corgestion OF bank leans ard the
~Eefusal OF .he Federal Reserve
Board 20 force Individual banks To
discriminate III favor of seasonal
business makes matters vastly
worse
This is an old story, but unfor-
tunately 1t is a story that must be
repeated over and over because
that's all there Is the matter with
the market. The responsibility for
the destruction Of business in the
United States should be placed ex-
actly where II belongs. Wall Street
has been more than conservative.
Future Money.
Money did not go above per
cent. Professional opinion as to
what rates will prevail in the near
future range from per cent to
40 per cent. The 6-per-cent rate Is
what one OF the largest investment
holders expects to see before the
end OF this per cent. The 20 per
cent is what one of the big pool
operators will be charged before
October
II was perfectly. safe to advance
the railroad stocks under manipu-
lation because owners of those
stocks have them at such high
prices that there was no danger of
meeting any selling OF Importance.
But for every share OF railroad
stock purchased there was an In
dustrial stock sold as a hedge. The
rails thus bought could be liqui-
fdated at losses and the operation
would still be profitable by reason
: Of the great decline of the indus
trials. The awkward feature of the
Situation is that most of the indus
trial stocks sold were for long ac-
count. Even yet there is no short
interest of Importance.
When announcement was made
that Allan Ryan had retired from
the Strcmberg board. of which he
was director and chairman. there
was sudden advance of the stock
of nearly seven points. There
being no official announcement that
Stromberg had been purchased by
one of the big motor companies, the
Street began selling the stock and
il broke more than nine points.
This caused breaks in Replogle, Va
nadium and Consolidated Textile.
with all of which securities Mr..
Ryan's name has been associated
with more or less justice. All of
these issues closed at the bottom
and weak.
What hurt the steel stocks more
than any one other thing was a re-
port that large mills might close
down because they are cluttered up
with finished products that 1t will
take the railroads a month to clear.
One steel interest denied it,. but the
selling was already in progress and
could not be checked.