New-York tribune., 1920-11-08

Eea6lHg, which they hoped might pos
oiy 9ursuo similar courses for the
benefit O. the etockholders. The cut
.ing Of melon adds no real wealth
to property. In the long run it al.
vays 'detracts from the value Of the
original security. However, in the
Southern Pacific case the new plan
makes the wealth Of the oil lands ln-
ncdiately avaiablc for the profit Of
tho stockholders instead Of remote
and always uncertain possibility.
Railroad stocks, particularly those
OF the dividend paying roads, we're up
for the week, but industrials moved
lower. The trend is measured by The
Tribune averages, which chow that
twenty railroad stocks rose during the
week from T1.45 to 72.s5, While thosc
Of thirty industrial corporation.
slumpcd from S5.53 to $3.50, making
the decline Of the fifty stocks from
1890 70 1852. Although the trend was
toward slightly lower quotations, bond
averages revealed little net change.
For the current week there is no
elgn OF Immediate change in the indus
trial and trade situation. The survey
OF conditions in fourteen principal in
dus,rial cities in the United States.
presented i'll yesterdays Tribune, meas
ured the extent Of depression and, al
though business leaders throughout the
country seem hopeful regarding the fu-
ture, there IS no certa lnty that the read
Justmcnt movement has ss yet fully
spent itself The indications point the
other way, and industrial America looms
the process OF dehation. Although much
OF what 1t now taking place in indus
try has probably been discounted By
the stock market, the evidences Of re-
cession blacken the speculative atmos-
| phere, particularly IS they come at
time when the supply Of call money
is scarce and when the European ex~
changes arc again displaying panicky
| characteristics. Unable to profit by
speculation for the rise, except in the
rails, many OF the professional traders
have turned bcsris!, for the quick turn
and are for the moment IN quest of
lower security prices.
Money continues 20 flow from New
York TO the interior OF the country.
Here, apparently. is the main explana-
ton tor the str!ngency in the call
rk az
Exchange borrowers had to pay from
TO 10 per cent last week to cover
their requirements. The demand was
! not especially heavy, but the supply
was rigidly limited. 1t s interesting
to observe In this connection that it
Reserve Bank put into effect the irst
rise in rediscount rates. According to
recent estimates the stock market loan
account probably does not exceed
S90o, 100000 and it may be less Ayear
ago, when speculation WAS unrestrained
loans exceeded $500 100000 The
drift OF banking funds to the interior
since August IS seasonal movement.
, and is of course intimately connected
with the harvesting and marketing Of
the crops. especially in the Middle
West These funds will eventually re-
turn to New York, but in the interim
their withdrawal from tho local banks
tends to tighten the situstion locally.
The banking view is thst Liquidation
n the interior Of the country IS pro-
crossing steadily and in an orderlv !
manner, Signs are appearing Of au
easier banking position in inland dis
tricts. especially in the West. This i.
reflected in a measure in the more &C
tive demand on the part OF these banks
for prime commercial paper For two
or three weeks the interior banks have
been coming into this market in search
Of prime commercial bills. Thereto
forc they were not sctivc buyers. The
assumption made BY local bankers is
that the interior institutions are be-
ginning TO accumulate funds and are
putting them at work through the
medium of the commercial paper mar
ket This may be interpreted as
first sign OF an easing tendency in
commercial money
Developments In the foreign e.-
change markets have bordercd on the