The New York herald., 1920-01-17
TRADERS AIDED
BY UNFAvORAbLE
EUROPEAN NEWS
Indications of Further Advance
in Discount Rate Also
Factor.

Stocks were under pressure again
yesterday by professional speculatofs.
Among the excuses employed by that
clement for it's attacks were cabled re-
ports that Great Britain 10 preparing
for war against the BoIsheviki In the
Tar East and that the latter had taken
odessa, the great Russian wheat port
on the Black Sea. Added to those
stories was the testimony OF General
rssker Fl. Bliss in Washington that un-
less Poland. the great western bull
wark against Bolshevisna," is sup
ported. Lenine and Trotzky will over
run Europe.
The fact that the Clearing House had
placed a maximum interest rate OF "a
per cent on bank balances. leaving the
way open for further advance OF the
Federal Reserve discount rate on ninety
day commercial paper was also used az
bear argument. a Interpreted inte
simple English, the Clearing Houses
action means that the most powerful
group of banks in the country has
taken official recognition of dan
gerous initiation of credit throughout
the United states and has removed the
greatest obstacle encountered by the Fed.
eral Reserve Board in carrying out its
expressed wish to correct that situa ton
Wall street believes an advance is int
nlinent In the rates for funds to borrowers
who speculate in commodities, in rierchan-
disc and in farm lands. Although ii
realizes that in this particular case it is
not the Immediate target, nevertheless il
10 aware that the share market is particu-
larly sensitive to Developments In conriec-
ion with money. 1t acted accordingly.
Confronted by that budget of news, tho
gan xt-sr },, x,1 ,S,I +r
stocks. In the lack Of purchasing power
tho professional SPECTATORS for the decline
found their greatest aid. Ar>
At the outset the bears concentrated or
the oils, the shipping and rubber stocks
IN the final hour they turned their atten-
ton to the coppers and to the steels. with
the result that at the close the market
generally appeared weak. That con-
dition was brought about in the face OF
encouraging trade reports by the va rious
steel, railroad equipment and automobile
industries. indicating volume of business
for the current year exceeding that OF
1919
But pessinlsm is rife in stock market
circles. Asset values are ignored. The
short interest, however, has grown to such
proportions a position on that side Of the
market must soon become uncomfortable
The dow vnM ard movement yesterday was
halted at times by bear profit taking
DrOugnt about Dy alarm ana Dy ulSap-
pointment over the failure OF declining
i;riccs to induce more liquidation.
One of the encouraging features was The
-trength of low priced railroad issues
Apparently those stocks ere being steadily
accumulated in view of TIE progress being
made in Washington toward a solution oi
the railroad problem.
While the general money situation has
; zen the underlying cause of all recent
aaknoss in the stock market. funds were
comparatively easy yesterday. The re-
rewa rate on cali loans was pei
cent. but in the afternoon money was OBJ
tainabe readily as low as per cent
Time money, however, was out of the
Question.
Allied exchange declined sharply be-
cause of the fear that England will be
forced TO take up arms again in order TO
check the Vaccinations of the Bolsheviki.
For the same reason cotton broke sharply
in liverpool.