New-York tribune., 1920-12-03
Prices Rally
In Irregular
Stock Market
Firmer Tone Is Apparent
After Early Weakness;
Money Rates Steady and
Grain Market Strong

Irregularity tending toward frmness
prevailed IN the speculative markets
yesterday. Grain quotations were strik-
lnslv higher for the day, and prices
for stocks, which drlfted toward slightly
lower levels until midday, climbed up
ward IN the afternoon, A reaction
toward the close efaced most of the
days gains in the cotton market.
The atmosphere of the financial dis
trict seemed much brighter. as traders
emphasized the favorable effects of the
taking over by strong banking interests
recently of the speculative accounts
of large traders, whose margins had
become impaired as a result Of many
months Of declining security prices.
These weak spots. until corrected, over
hung the market as threat to pre-
valllng price levels and as 5eirhulant
which encouraged operators for the
decline. Opposed to this attitude of
relief is the opinion that neither credit
nor trade conditions are vet ready for
the making of an impressive bull
dem monstratlon. The result in the stock
market is days of fluctuations within
narrow boundaries, in which floor
traders play an exceptionally CON
splcuous role. In the commodity mar
kets real buying has been attracted BY
current depressed quotations. and the
lnslstence of many commission houses
that the time has come to buv stocks
has induced orders from bargain hun
ters. A period like the presen. is often
used for the accumulation Of stocks.
cut this time large financial interests
occurred securities through necessity
IN taking over the affairs of traders
who no longer could continue on their
own.
Weakness in Southern Pacific con
trlbuted to the unsettlement in tho
market In the forenoon, as the stock
sold ex-news. When shorts tried to
cover the low prices of the day. quo
tations surged upward, and the rally
vas retained to the close, although
nnal quotations were fractionally lower
than the best for the day.
IN tho domestic money market con-
dltlons revealed little change. and
FUNDS at call for stock market purposes
were available all through the session
at per cent. Fluctuations in the
foreign exchanges were without sig
nlhcance. 1t became known yester-
day that an important factor in break
ing the prevalence of strineencv rates
tor call loans was the lending Of sub
stantal amounts Of British, Canadian
and French funds. This may Indicate
a desire to improve market conditions
here to enable foreign interests to
N'ittPiC'C il4HludllDH OIL SeCuIlIleS on
more favorable terms.
The current weekly statement IF the
Bank of England indicates that the re
serve ratio has fallen to the unnrece-
dented figure Of 790 per cent. refectinc
an increase in liabilities resulting from
efforts of British banks to take care
of their customers during the period
OF drastic declines in commodity prices.
The movement toward lower prices is
about month further advanced here
than in England. and that country is
now going through what Americans eY-
perlenced few weeks ago. Incident
ally, when translated into the same
formula used for compiling the ratio
against deposits and Federal Reserve
notes outstanding by the Federal Re
serve banks, the ratio for the Bank Of
England ceases to be alarming. On
this basis the reserve ratio of the Bank
Of England is in excess Of ~ per cent,
and, if fduclaries are credited as re-
serve, es we'll as gold. the ratio rises
TO 4s per cent. Last Saturday the com
bned ratio of the New York Reserve
Bank was 4o.8 per cent. But in Eng
land 100 per cent reserve is figured
against notes before any is credited
against deposits. In practice the notes
issued by the Bank Of England against
gold are used as assets of the bank
ing department. which carries the de
posts as liabilities. The gold and
other currency carried in this depart
ment of the institution represent till
money.