New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-04-16
Stock Prices Rally
At Close; M oney
Touches Is Per Cent
Prices Fluctuate With Trend
of Call Rates; Discussion
Centers Around Slump
of Liberty Bond Issues

speculative security prices nucCuaC-
ed with call money rates yesterday in
market in which the tendency was
not clearly defined. When money was
in scant supply, as was the case in the
middle of the day and we'll into the
aftenoon-for brief period loans
were made at IL per cent, the highest
level touched for some time-the
professional traders in control of
things sold stocks rather freely in an
effort to produce liquidation. For a
time in the latter half of the exchange
session it looked as if the stage were
set for heavy selling movement, but
the market turned for the better in
the closing half hour on drop in
call money to IL per cent. On the
late rally considerable part of the
ground lost earlier in the day was
recovered, but even then the closing
range presented very uneven appear
ance.
Financial discussion conferred almost
entirely about the monetary situation,
foreign as we'll as domestic. If any
further evidence Of the greatly
changed condition of the investment
market here were needed, it was sup
piled in the further sharp fall in the
price of the outstanding government
war loans, the majority of which, un-
der pressure Of insistent liquidation,
dropped to new low records. Three
issues, the Liberty Loan second 4s,
the second AIS and the fourth AIS.
declined below 81 for the first time,
showing discount of more than 10
per cent from the prices at which they
were offered. The days net losses on
these bonds ranged from Il to Il and
the movement of prices in this partic-
ular group supplied one of the most
striking developments of the day in
the financial markets. Bankers report
selling of these bonds by institutions,
which in many cases are finding the
high interest rates paid upon recent
new capital issues much more attract
i've for investment. Many of the Lib
erty bonds are now getting down to
a level where they afford return of
close to 6 per cent.
Action of the Bank of England in
marking up its discount rate to per
cent occasioned little surprise, for it
had been anticipated. The increase is
indicative of the steady rise in the
loaning rate on credit the world over.
1t is on rare occasions in the past that
VAN ~~'6AAoAA b0Ah Aido 1OuIlU IL ncCcS-
sary to put the rate so high as z per
cent. The last time it stood at that
level was in 1914, when the war panic
caused all the leading financial cen.
ters of the world to take steps to aug
ment their gold reserves. In the pres
ent instance the action of the bank is
plainly aimed at checking undue credit
expansion. 1t brings the rate more in
line with other centers. The foreign
exchanges moved in favor of London,
but slightly against the Continental
countries.
Borrowers in the call money market
found after the opening and renewal
rate had been fixed at per cent that
supplies were not sufficient to meet
the demand at that level. Accordingly
as the day progressed the rate moved
up until in the. afternoon it touched
Is per cent. Toward the close offer
ings were more liberal, causing a de-
cline to IL per cent Withdrawals in
cident to the middle of the month
payments undoubtedly explain the
tighter position in call money, and it
is believed that the situation ought to
become easier within the next few
days. The payment by the government
on account of the semi-annual interest
on one of the Liberty Loan issues yes
terday alone amounted to more than
S42,0O0,000 in this district and about
S140,O00,000 for the whole country.