Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-07-10
BY STUART p. WEST.

NEW YORK, July 1O-The stock
market has done this week precisely
what it was expected to do when the
political conventions were out of the
way and the money strain incident
, to the half-year settlements had
passed. June. with all its dullness.
was a period of accumulation. The
public was kept away because the
market seemed to be Improbable and
because money rates were stiff. This
| enabled the speculative cliques and
big operators to quietly pick up stocks
without competition. 1t was said
here at the time that those who paid
attention to the nothing doing" talk
would probably have to pay con-
siderably higher. by waiting until
after the Fourth of July. and this is
exactly what has happened. Now
that the market situation has been
made to look more attractive and
outside buyers are coming in the
price level is up anywhere from 5 to
Is points.
Action OF Money Rates.
Nothing has indicated the change in
the inside position so much as the &C
ton of money rates. While the accu-
mutation was going on we had
and 10 per cent call loan renewal with
the rate for day to day loans running
up to 10. When the accumulation had
teen completed the renewal promptly
fell to 7 per cent. and there was an
abundant supply ready for borrowers
at this figure. 1t did not matter that
the speculative demand was on the
increase or that the government was
making a large draft upon it's epos-
it's. When the right people had the
stocks the money question became
subordinate. When it was desirable
for stocks to be kept down to permit
accumulation a great deal was said
about essential and non-essentiaI
credits and the public was led to be-
lieve that the credit situation was al
together too delicate to permit of an
expansion in Wall street operations.
because these are of the nom ssential
type.
No Objection to Borrowing.
But this sort of comment has been
strangely absent in the discussion of
the past week. There is no objection
to Wall streets increased borrowing,
nor will there be until there has been
chance to distribute the stocks that
were gathered in cheaply last month
The program calls for a fairly active
market with rising tendency
through the rest of July and quite
likely well into August. BY then the
distribution will presumably have
been accomplished and we shall hear
about the crop moving demands and
shall be told by the same ones who
are so bullish now about how foolish
wan street was to indulge in a specu-
lative movement when every dollar of
available credit is SO urgently needed
to finance the harvests
The main significance attaching to
the present advance in stocks Is that
IT is a reaction from the unwarranted
pessimism of two months ago. Actu-
ally the situation this week with
prices going up is very little different
from what it was in May with prices
going down. The change is principally
one of sentiment. The public was
frightened by lot of wild financial
writing by propaganda which
seems to have had a direct connec-
ton with the bear campaign on the
stock exchange and most of all by
the utterances of men in high places,
bankers and politicians-all of which
tended to spread the idea that an in
dustrial crisis was impending. 1t was
this scare which was reflected in the
break in May. 1t is. the recovery from