The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-24
FINANCIAL NEWS
AND COMMENT
Sharp Spirit of Public Utility
Issues Features Quiet
Stock Market.
BANK STATEMENT POOR
Local Institutions Have Sec
Ond Largest Reserve Deficit
in Several Months.
BANK STATEMENT POOT

The principal feature of yesterdays
quiet session on the Stock Exchange was
another sharp squirt in public utility
shares, led by Western Union and the
gas and the traction issues. Those
stocks and a few other specialties made
very rapid progress, but the rest Of the
market remained in much the same posi-
ton that 1t was in during all of last
week. namely. in the trading area. AL
though the rise In special stocks lifted
standard issues up fractionally on the
day, the net result was not important
enough to indicate that the danger of
stocks going through the levels at which
fresh liquidation could be expected had
passed, The market in reality was too
quiet to indicate anything definite in
either direction, but it was still to be
said in the markets favor that stocks
showed no disposition to sell off, Rather
the principal part of the days activity
occurred on the buying side which is al
ways considered good sign by market
observers.
There was no change of Importance
in the news. The British strike situa-
ton appeared less serious on the sur
face. but the situation was not clear
enough to permit stocks to break away
from their trading area. 1t might have
been expected that the steel stocks
would have advanced in anticipation Of
Tuesdays quarterly earnings statement
of the Steel Corporation. but stocks in
that group were held back by Judge
Gary's confirmation of the theory that
steel prices must be reduced. The theory
that Wall Street is going on in that
connection is based on the one that
earnings represent past history. In other
words the Street is o great deal more
interested in the amount Of orders on
hand TIN 1t is in what earnings have
been for the last three months. In the
case of Lacl<aw wanna and Republic Steel
there has been a very decided decrease
in new orders. and the same thing is ex-
pected of the Steel Corporation. al
though the decrease in that instance is
likely to be less marked because of the
lower price schedule maintained by that
corporation.
The rise In public utilities, as before.
was due to realization that these stocks
| had been thoroughly liquidated and were
/ bound 10 benefit from the price cutting
/ movement sweeping the country. just as
! the railroads are beginning to gain from
lower prices The reason that the move
ment in public utilities stood out SC
prominently in yesterdays market, how
ever, was because a better class of stocks
was represented in the advance. The
rise in Western Union and Consolidated
| Gas, for instance. gave the movement
an appearance Of stability which any
recent rise has not enjoyed be
cause of participation of mostly low
priced Issues Another stock that STOOD
out was United Fruit. which experienced
a very sharp advance in anticipation o
its stock dividend. 1t is now understood
in good quarters that that stock divi
dend may be as high as 100 per cent
against a so per cent. one first rumored
There were also special movements in
few low priced coppers. but they at
tracted very little following The res
of the market was extremely quiet
The second largest deficit in the re
serve position OF the Clearing Hous
banks In several months was disclose
by yesterdays statement The impair
ment amounted to $50. 1000, 900. Notwith
standing the fact of a big deficit In tn
reserve of member banks and its Dor
rowings of s25 100000 from other re
serve banks, the local reserve bank wa
unable to prevent shrinkage in its re
serve ratios. The New York Reserv
Bank lost S22 900, 900 in its gold reserv
at a time when borrowings Of $4,000.
900 should have increased II. Had II no
been for borrowings and drafts OF Clear
ing House banks. as evidenced by tn
dencit, tne local reserve BANK Noui
have shown low reserve ratios. AS
was. the ratio of total reserves to de
posts and Federal reserve note liablli
ties combined was 1876 per cent, agains
1877 per cent, and the ratio of reserve
70 net deposits. after providing 40 pc
cent for gold against notes outstanding
was 36.7 per cent, against 81 per cenf
IN the preceding week. Member bank.
which increased their borrowings 81
100000 during the week. are borrowin
from the Reserve Bank nearly $500
100000 In excess of their cash reserv
with that institution.