Evening star., 1920-01-29
CREDIT SITUATION
LEVER OF MARKET
BY STUART =. WEST.


marking up of standing call loans from
to 10 per cent. 1t was still ques-
tion whether or not the renewed
stringency which began to show itself
yesterday was due to government with
drawals, which would be only temporary
in their effect
But the immediate result in the
stock market was to deepen the i'm
preston that nothing much in the way
OF an advance could be expected until
the credit situation was Strengthened
out. On the other hand, there was no
important selling.
Traders offered down prices soon
after the start. but did not succeed in
nringing out any large offerings Had
there been any distribution of stocks
IN the old-time sense-that is. had
they been transferred from large
holdings into the hands Of the specu-
latlve public-thiS sort of action
would have been inconceivable.
Market Grows Dull.
A similar advance in the money rate
two and half months ago caused Il
very serious break; today the mari.et
t1erely grew dull.
1t was an important test first of
the Improvement that has come about
in the Wall street position since the
decline which followed the culmina-
ton of last autumn's boom. and. sec
ond, of the extent in which the rep
resentative industrial shares are con-
centrated in the hands of people who
cannot be induced to sell because of
the extremely high charges made for
the carrying of stocks
Railway shares We're inclined to sag
on the announcement from Washing
ton that regardless of what Congress
does or does not do in the matter of
railway legislation the President will
not delay the return of the roads be-
yond March 1. There were some
strong points among the industrials
American Can was bought in antici-
patton of a highly favorable annual
report.
A short interest in the motor shares
was run in when Chandler Motors
was bid up sharply. But in the main
the check imposed by the money mar
ket made itself felt in discouraging
new buying even though it did not
cause much selling.
American Can Active.
American Can. which has a habit of
doing the unexpected, was one of the
first stocks to run counter to the
early depression in the general mar
ket. There is no reason for an ad-
vance in Can except the prosaic one
of earnings. The annual statement
doubtedly make a highly favorable
showing. 1t is this that the stock is
being bulled on, and not any expecta-
ton of an early Inauguration of divi-
dends.
American Can is under the same
financial guidance as National Bis
cult, which never paid a dividend un-
til there had been such an accumula-
tion of surplus that the stock was
selling above par.
Dispatches printed from Washing
ton. while not official. made the
CT fp a nvaf l.,
President was determined that the
railroads should go back to private
hands on the date now fixed, March
L. This was interpreted to mean
that there would be no postponement
no matter what happened TO the rail-
way legislation in Congress.
Wall street accordingly began to
talk about the unpleasant possibilities
for some of the so-called weaker
roads in. case no adequate protective
measure should have been adopted in
the meantime, and there was selling
on this account in stocks like Balti-
more and Ohio and New Haven. On
the other hand. stocks of the stronger
roads, like Union Pacific and South
ern Pacific, which would welcome
private ownership under present con-
ditions without any further legisla-
tive measures, were not affected.
virginia Carolina Chemical.
The activity. lin Virginia Chemical
this week appears to be based on the
belief that another extra dividend
may be declared.
Virginia Chemical has been ma
terialIy helped recently by the in
crease in the selling price of fertil-
iZers and the impossibility of supply
ing the demand. During the war pc
riod the company has built up a sur
plus of close to SIS share and could
cut a melon at almost any time were
the Supreme Court to hand down a
favorable decision on the stock divi-
dend tax case Virginia Carolina paid
Sc and an extra of 81 last year.
Call Money to IA Per Cent.
The noon rally carried Chandler.
Stutz and General Motors 8 to
points over yesterdays prices, steels
also deriving substantial benefits.
Associated Dry Goods reacted on
news that dividend action had been
deferred. and the list developed fresh
reactionary tendencies when call
money rose to II per cent.