The Washington herald., 1920-08-27
STOCKSSTRONG
AT The CLOSE
Expectation Of Easier
Money Rates Holds Market
Together Well.
CALL MONEY AT go
Rails and Tobacco Display
Greatest Strength-Some
Oils Also Active.
CALL MONEY AT go

New York. Aug. 1O.-AllllouSh
money went to per cent today in
Wall street after renewing at per
cent, the stock market closed strons
and fairly active. 1t was the first
day of the increased railroad rates,
and traders celebrated that a little
bit. But the real reason for the
strength of the market was the fact
that after the end of this week a
sharp decline is expected in the
money rates, together with better
supplies of credit. The administra-
tion is keenly alive to the political
dangers OF the banking situation.
Cotton options had a swing Of 100
points between high and low. Rail
road stocks and tobaccos showed the
greatest strength, but there was also
- activity in a few of the oils. Hous-
ton Oil, which brought in a new
we'll. was particularly strong. Unit
ed States Steel, Southern Pacific,
Reading and Union Pacific were the
market leaders
Some readers OF this column COM
plain Of what they say is an incon-
sistency, because al the same time
the writer talks Of business going
into a collapse and the stock mar
ket entering a campaign for higher
prices Such a thing is entirely con-
sistent and has been seen many
times. As business declines in COM
merCial lines there is less and less
demand for credit, and Wall street
never OverloOks an opportunity to
use idle money.
A call money rate of 9 per cent
today was caused partly by the
withdrawal Of money by the United
States government. In addition to
that there are the September l dis
bursements for interest and divi
dend to be, provided.
Wall Street is not afraid of a
high money rate now because pres
sure is to be brought to bear on
the Federal Reserve Board to stop
profiteering in money.
Rails.
For the advance in the railroad
stocks today no new reasons need
be assigned. The machinery of a
Constructive market has been we'll
oiled, and is now beginning to fUnC-
tion. Naturally the rails will be
prominent and also naturally only
the high class rails and industrials
will be pushed to the front in the
early stages Of the campaign. The
Campaigners are now picking one
bargain after another and parading
them before the speculative public
There are to be numerous railroad
campaigns. The big systems are to
take in little lines. A period of
development among the railroads
equal in speculative Importance to
that among the industrials fifteen
years ago is about beginning. The
path big business is to travel has
been clearly marked out by the Su-
pTeme Court and Congress.
The American people are to have
investment opportunities never be-
fore possible.
Tobacco Stocks.
Activity in the tobacco stocks to-
day was due TO circulation of re-
ports of earnings, not only of the
retailing departments but of the
manufacturing companies. The
United Cigar stores and Tobacco
Products are doing three times the
business they dsd at this time last
year. The Consolidated Cigar Com
pany is making five times as many
brands as they were a year ago and
the company is earning at the rate
Of S35 4 share on its common stock.
it takes but $4,000 a year to pay
the dividend sn its preferred stock
and ii is earning more than that
every month. That is why Consoli-
dated common and preferred have
been so active recently. That is
why Wall Street expects something
more than the present dividend to
be declared at the meeting which
will be held in about two weeks.
The American Sumatra Company,
whose stock was hurt in the mar
ket by the death of several large
holders whose interests had to be
marketed. is now in a strong tech
nlCal position because all those
holdings have been marketed and
the stock is selling at less than
half its book value.
Announcement that 35 900, 900 tons
OF American coal will be exported
To Europe means a great deal to
the petroleum companies. If the
great coal strike actually takes
place in Europe even this great
shipment Of coal will be insufficient
70 provide warmth and power for
Europe this winter. Its shipment
will depIese American supplies
which are already under normal.
This will naturally create a demand
for fuel oil.
Rumor is in circulation regard
ing the plans Of a South American
government to forfeit the oil grants
TO certain companies whose stock s
are dealt in by Wall Street Mexico
is not the only country where prop
erty investments are doubtful.
MONEY.