New-York tribune., 1920-08-23
Trade and Finance
Developments Of the Week
and Their Bearing ON
the Outlook

SAAACAAS0 u 4uO WC0k
and Their Bearing ON
the Outlook
Tho stock market last week was
not mHsA <effsrent from what the
Stress mas been experiencing all sum-
mer long. The professional traders
were completely In control. They be-
came more courageous on tho selling
side and offered stocks freely at the
outset Of tho period. applying special
pressure on stocks that appeared vul-
nerabls to attack. Their efforts met
with fair degree Of success, even II
no real liquidation was produced. un-
til point was reached when tho mar
ket became oversold. which meant that
tho outstanding short account had be-
come largo and unwieldy. Where
upon tho professionals who had sold
for tho decline began to mako repur-
chases and in so doing found 1t neccs-
sary to bid stocks up In order to cover
their requirements.
mean a great deal. Day to-day price
changes mover do mean much even in
an active market. It is rather the
broad price swings that are significant
and prophetic. The record Of stock
market performance as it stands to
date this year shows a progressive de-
cline in stock values. There have
been temporary recoveries, but they
have been only brief Interruptions in
the general trend. The stock market
began to discount the current slacken-
ing OF business before the turn came.
1t will discount industrial stabilization
before there is concrete evidence Of
that fact. Many observers hold that
the market is nearing the turning
point, but few are willing to back up
this opinion with buying orders. Hence
the market mills around and tho pro-
fessionals are able to churn stocks up
and down at their bidding.
1t seems 4 wellnighs hopeless task
to try to arouse enthusiasm in Wall
speculative securities. For every bull
there seem to be hundred bears and
the latter have most Of the logic on
their side. Making the rounds Of the
brokerage houses where stocks are
bought and sold, one finds a DISPOSE
tion on the part of folk who follow
stocks day in and day out to sidestep
and surround with a high barrier of
qualifications all representations re-
garding stocks. One will be told, for
instance. that there are no reasons
whatsoever for buying stocks in view
of the innumerable imponderables in
the general situation. But at the same
time one will be advised that it is dan
gerous to sell stocks at these levels,
since prices are down anywhere from
80 to so points from their highs of last
year. To the man who is not we'll
versed in the ways of the securities
mart the problem involved in making a
decision regarding present or future
commitments Is most difficult. 1t Is
small wonder, then, that the public has
quit speculation almost en- masse and
that even the professionals, who are
supposed to know all the fine points of
the game, are proceeding cautiously.
Much is heard about the wicked bears,
who are held to be responsible for
many Of the troubles now besetting
the stock market. No doubt there is
short selling Of vicious character 60
ing on, especially in the case of spe-
cial issues which are open to concerted
bear attack. 1t might be a good thing
for the Stock Exchange to put back into
operation the regulations in force
shortly after the United States entered
the war to stamp out vicious bear raid
ing. Those were fairly effective then
and probably would help now In stop
ping such practices, which injure real
values and react upon the whole mar
ket. But If the trend Of prices Is down.
ward, as 1t has been for several
months, no rules aimed at the short
sellers will check the movement, for
liquidation will have to run its course
All oCSuIlIicS dS we'll an IN COmmOQlCleS.
And when the process of deflation is
completed the pendulum will swing
back in the other direction.
The stock market has been and is
still suffering moro from the enormous
outpourings Of new securities floated
on tho wild wave Of speculation In
1919 than any other one influence. AS
a prominent banker put 1t recently, the
market has been unable to assimilate
the huge mass Of not only undgested
but indigestible securities. Only now
are many stocks which were unloaded
upon gullible public just beginning
to get back to level somewhere near
their real values. In times like these
seasoned securities are always the best
to own. The newer issues oftentimes
have way Of disappearing from the
trading list.
At the close of last week the aver
age price Of thirty representative in
dustrial stocks stood at 85.37. after
having fallen on Wednesday to 83.O3.
The recovery from the low for the
70 %o