Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-08-30
BEARS ENCOURAGED
BY NEWS OF DAY
Make Successful Efforts for
Declines in IndustriaIs.
Rails Resist Pressure.
BY STUART p. WEST.

BY STUART p. WEST.
NEW YORK. August 30 (SpeciaD.-
There was very little interest in the
stock trading today except as the
proceedings afforded further trial
of the markets ability to resist un-
favorable news. The professionals
came down to business this morning
altogether bearish.
They had read about the strike on
the traction lines in Brooklyn and
the threatened tie-up in the anthra-
cite mines. This recalled the series of
labor troubles which began about
this time a year ago and it led to
considerable discussion as to whether
the business community had to face
series of similar disturbances now.
They had also read an unfavorable
Interpretation into the Saturday bank
figures emphasizing the sharp de-
cline in the reserve ratio at New
York and minimizing a comparatively
slight loss in the banking condition
throughout the country as whole.
On these two grounds the active trad
crs started in to force prices down
and succeeded in getting results to the
extent of a half point to a point and a
half among the more sensitive indus
trials. A few special weak spots crop
ped out notably in the shares of COM
panies manufacturing motor trucks.
But it was entirely plain in the gene
raj list very few stocks were being
bought out by this bear raiding.
The market became intensely dull on
the decline which is precisely what it
would not have done had any genuine
liquidation been in progress.
Moreover. the strength of the rails,
which was very conspicuous even
was a manifest stumbling block in
the path of operations for the decline.
RepIogle Shorts Trapped.
The bears who cracked Replogle
Steel wide open on Saturday are hav-
ing hard time filling their short con-
tracts, due to the very simple fact that
when they sold the stock short they
sold it into the proverbial bag, and
the bag has been closed.
1t is well known that Replogle is
unusually closely held, and that the in
siders know where practically every
share of stock is.
These insiders spent the week end in
Saratoga, but they did not lose track
of the market while away from the
street. Their supporting orders were
placed before they left town. and they
/
from the bear party. The shorts were
still scrambling today to get out of a
very tight position.
Bank Statement.
To characterize Saturdays bank
showing as disappointing was equiva-
lent to asserting that the change in
the one New York district was of
more consequence than the change in
the entire twelve districts including
New York.
Under the old conditions when espe-
cially at crop moving time 1t was
every bank for itself, the position at
New York was the supreme considera-
ton from the standpoint Of the Wall
street markets.
But under the federal reserve sys-
tenn where the principle of mutual
self help is in force things are very
different.
If the reserve bank at New York
ton in order to strengthen the posi-
ton elsewhere there can always be a
shifting around again Of resources for
New York's benefit.
The main reason why the New York
ratio of reserves to deposits ana fed
down from 1915 to the low figure of
1876 per cent was because the local
institution lost $12,000,000 through
| the gold settlement fund, this being
an indication OF the QemanuS from
the agricultural regions.
Inasmuch as French gold has al
ready begun to arrive in connection
with the settlement of Frances share
of the Anglo-French loan, and with
gold from England also on it's way
day--this drain upon the New York
gold supply is evidently not causing
much concern.
Rails show Strength.
The real feature of the day on the
stock exchange was not the AFFINITY
of bear operators to uncover rev
weak spots here and there among
| individual stocks, but rather the con-
| sistent demand for the railway stocks,
which carried a number of them to
higher prices than any reached since
| the announcement of the freight rate
decision.
Among the rails which went through
their previous highs were Union
peake and Ohio, the st. Paurs com
mon and preferred, Northern Pacific
Great Northern preferred and the st.
Louis and Southwesterns.
! The readiness with which these
| stocks were taken indicated that they
were being absorbed regardless OF the
| uncertainties which were holding
back the rest of the market.
The industrials for the most part
| rallied enough in the afternoon under
| the lead of the rails to restore most
of their forenoon losses. And this In
| face of an per cent call loan re-
nowal and of 10 per cent paid by bor-
| rowers for the day only.
| 1t was another illustration of the
| fact which has now become familiar
that a run-up in call money rates fs
| of no special significance in the stock
market nowadays and that counts only
where conditions otherwise make it con-
| venient
Sterling exchange hung around the