New-York tribune., 1920-08-16
Trade and Finance
Developments of the Week
and Their Bearing on
the OutlOOk

is plainly needed in Wall Street. The
of proportion, insisted on nothing too
much. Excesses Jared tho true
Greek beyond all else. In the fnan-
cial district. folk habitually overdo
the market usually 60 higher than
intrinsic values warrant and, con-
versely, selling waves frequently carry
securities far below their true value.
Last week the market seemed clear
ly in an oversold condition. The bears,
emboldened by 1.-The alarming European
news and by the recession in industry
and by credit defation, completely
dominated the situation in the
previous fortnight. Security prices
under their direction had followed the
technique of Che shoot the chutes. The
price structure had yielded to bear
pressure with the ease with which ice
melts when boiling water is poured
over it. The mere fact of the decline
had scared many owners of stock who
had bought their holdings at much
higher levels and induced excited
liquidation. Moreover, before the
downward movement was checked the
money lenders contributed to the
momentum by calling loans secured by
unseasoned stock, in which they had
lost faith.
1t seemed like blue Monday when
the market opened a week ago. after
the previous week Of spectacular COL
lapse. AS if by habit, the professional
4 operators sold stocks without much
restraint, and before midday indus
trial securities tumbled to new low
levels. And then the turn came. A
rumor that truce had been signed
by the Russians and the Poles, though
without basis in fact, induced short
covering, and marked the turning of
the corner. The actual developments
IN Europe during the week, with the
exception of the possible development
of breach between Great Britain and
France, were looked upon as favorable
by market observers. But the hotter
tone in the stock market which per-
sisted for the rest of the week came
mainly from internal factors. The
heavy selling had left the market in 3
stronger technical position, and on
subsequent days the professional
operators learned by trial and error
that 1T was no longer feasible greatly
TO depress the quotations of securi-
ties.
just as the late William James
suggested that people are. happy be-
cause they laugh and are sorrv be.
cause they cry, it seems to some OBJ.
servers of the f1uctuating prices that
make up the market that traders are
cheerfui because the market rises. AL
though it may be futile to argue
whether laughing is the cause or the
result of happiness or whether cheer.
1ul sentiment is the cause or the re.
suit OF an upward movement in the
security marts, it is an indisputab1e
tact that toward the close of last week
bankers and brokers and stock traders
1elt more roseate about the outlook
for securities
Every time a selling wave spends s.
sell there is crop of predictions thai
'he market has touched the bottom
Some brokers are now of that oninion
Ihe pursuit of the bottom is often 8,
idle and disappointing chase. The So
curity buyer need not waste enerpv !,
! searching for the lowest point; the wis
1 purchaser merely need make up his min,
: whether the security he is CONSIDERING is
IN MS opinion, cheap. There are tn,
many lmponderables in the present eco
nomlc and political situation to permi
any observer conscientiously to asser
that securities have gone as low "a the,
| viii. The known facts simply iustif
| the statement that the last great sell
4 ing movement brought stocks to nev
ana lower stratum, at which thew hav
SHOWN conspicuous ability to resis
Il further selling pressure.
II In the weeks bond market the trouhl
II was mainly astronomical. The difficult
L lies in the fact that August is here
II August, the month of smallest activit
II in the investment market. The staffs q
Il the great distributing houses are weak
/ ened all through this month by the yaca
II ton schedules, and customers are scat
Il tered IN resorts throughout the country
Il Inc untavorable aspect of the marke
n results from seasonal conditions. anf
despite the dullncss prevailing in tn
= market, bonds displayed firm tone q,
] through the week.
M. Parmentier who has come to Ney
York as special envoysof the Ministe
OF FINANCE at Paris, is in quest of ney
loan to France. The recent improve
ment in the American investment marke
and especially the success of the rs
cent Belgian and Swiss operations her
caused the French to alter their plan
k Tor meeting their share of the Anplc
FRENCH loan which natures on Octobc
10 next. For time, France believe
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