The Birmingham age-herald., 1920-05-21
LIQUIDATION WAVE FOLLOWS BANKERS
 HIGH PRICE WAR Many Issues Fall to Lower Quotations as Result of
 Stringent Credit
 Conditions
By AssooIated Fresa

New York, May 20.-The bankers war on high prices, declared at the behest of the federal reserve board, today brought another wave of liquidation in the se- cGrites market
 Primarily induced by the countrywide stringent credit conditions. this wave caused many stocks and bonds to fall to still lower quotations for the current movement.
 Support of substantial character was forthcoming. however, and bargain hunt CTS also were active in the more popular issues. As a result, prices rallied yigor- ously before the close Liberty Bonds and Victory Notes sharing largely in the re- covery
 Prominent bankers and brokers, al- though inclined to refer to the price cutting movement as "a form of hys- teria,'' nevertheless declared values of many standard railroads and industrials have iu no degree been impa fred by the higher rates for money. They asserted that. on the contrary representative se- curities have been placed on a more sound founda tion hf the action of the federal reserve beard and banks acting in com junction with that body.
 Reports from leading industrial and commercial centers were again to the effect that credits were contracting, but as far as could be learned this condition was due in great measure to the railroad blockade, which has tied up vast amounts of money
 NO CAUSE FOR APPREHENSION
 From every responsible re authority came assurances that basic financial conditions all over the country offer no occasion for apprehension. In the words of leading financier, the present movement is largely in the nature of a necessary readjust- ment of values including commercial and industrial inventories"
 While Wall street was seeking to ad- just itself to the new credit conditions, the price siashing movement seemed to be gaining ground among New York re- tailers who continued to advertise their wares at reductions.
 An official of the Merchants AssociN- ton said he believed there was decided tendency to reduce prices here in thu retail market. Although this was ham, pered by the freight tie-up which is caus- ing shortage of supplies to the distribu- tors. he said this reduction in price was noticeable over and above the reductions made by clothing and department stores incident to cleaning out their spring stocks.
 MORGAN GIVES VIEWS
 William Fellows Morgan, president of the Merchants Association. in discussing the same subject, said:
 ''The reduction of the prices of mer- chandise which now seems to be prev alent throughout the country, has been anticipated. It was inevitable as one of the steps of deflation which we must go through in order to regain normal conditions. The necessary preparations for the shrinkage of values, which really means an in- crease in the value of the collar. were long ago made by the banks. l do not anticipate that we shall have any trouble as a result of it. although cer- tain lines of industry may be more or less disturbed.
 "This readjustment has been re- tarded by the interruption of the transportation lines, especially in this city. The tendency of this nterfer ence with the free movement of mer- chandise has been to keep prices al high levels and even to increase them by cutting off supplies. The fact that food prices have not declined, l be- lieve to be attributable mainly. if not entirely, to this cause. Our progress toward normal conditions will be ac- celerated, and the danger of disaster will be lessened by putting stop to transportation hold-ups which consti- tute a menace to the entire country"
 STILL AFTER BROTHERS
 Washington. May 20--Regardless of inc sDreadiug wave of Drice reductions