The New York herald., 1920-12-24
FINANCIAL NEWS
AND COMMENT
Stocks Rise Vigorously Under
Short Covering-ROads
Buying Rails.

ket prices which appeared on Wednes-
day was converted yesterday into a
strong forward movement. A number OF
Industrial shares disclosed a really buoy
ant quality, urged along by steady in
flow of short covering orders. The rise
gained in force as time passed and.
closing around their best quotations.
stocks lately under severe pressure
scored net gains Of to points Buy
ing OF such issues as American Locomo-
tive, Bethlehem Steel class B. Crucfble
Steel, Goodrich, Lacllawanna Steel, Mexi-
can Petroleum. Railway Steel Spring,
United States Steel and Vanadium was
impressive both of a change of heart
among the short interest and Of scattered
purchases for investment. United States
Rubber supplied leading example of
the resiliency OF quotations during the
afternoon, for after the stock had been
driven down 2A points during sharp
drive of the morning. It recovered this
loss and points in addition. But the
industrial issues should not be singled
out as solely reflective of altered market
conditions. as Atchison, Chesapeake and
Ohio, Great Northern preferred, Lehigh
Valley. Norfolk and Western Reading.
Southern Pacific, Union Pacific and
other rails were only less prominent in
the advance than the strongest of the
manufacturing shares. Call money lent
at per cent. and offerings were in ex-
cess of the increased demand for funds
Market action during one or two days
following a prolonged decline is not the
basis for assumption of a permanent
change of conditions In discussing yes
terday's activities, therefore. all that
safely may be done is to record what
actually happened That great relief
was felt in banking and brokerage quar-
ters because of the rally goes without
saying, for such terrific melting of
values as occurred on Tuesday and the
early hours of Wednesday created some
forebodings of worse to come. Certainly
the slump has removed a great many
speculative accounts which had been
financed with increasing difficulty as the
decline gained headway; the time ele-
ment indicates that most of the selling
for raising cash for year-end use has
been completed, and the reported in
crease of investment seekers in the
Street during the last few days fore
casts what may prove to be more gen.
eral public support for stocks in the next
few weeks than has been seen since the
autumn fall of prices began These,
however. are incidents which. are the
natural products of a bear market of
Itself, and they afford slight ndica-
tions of real improvement of business.
What is much more worth while in this
connection is the news, which appeared
yesterday, that the Pennsylvania Rail-
road had ordered 100000 tons of rails
from independent steel makers imme-
diately after the latter reduced their
price to the Steel Corporations level of
s47 ton. An order of equal amount
had previously gone to Steel Corpora
ton subsidiaries, and as the New York
Central has distributed contracts for
$4,000 tons for 1921 delivery. it is likely
that much will be heard in the near fu-
ture of buying by the smaller roads and
systems. Rail business is considerably
more active than purchases of other
forms of railroad steel. but trade re-
ports indicate that things are looking
up in structural lines.
The November report of the Southern
Pacific was disappointing in contrast
with the gains disclosed by the Union
Pacific a few days ago. and goes to show
that the timo IS not yet here when
effects of the rate increases can be
shown I'm constructive fashion. Gross
operating revenue increased s4.696, 600,
but expenses expanded S6.256, 900 as
compared with the same month last
year, bringing a decline Of s2,20S, 900 in
net income.
/ Cotton felt something OF the stimulus
/ of the stock market. gaining about a
half cent a pound in future options.
Large purchases for export helped to
advance wheat futures u 10 Il cents
at Chicago. AS matters related to the
export market and conditions governing
banking conditions abroad are coming
in for closer study. the Bank of Eng
lands statement for the week attracted
attention. There was an increase OF
slightly more than 100000 in de-
posits, total reserve declined f23g6. 900
and circulation EXPANDED f334sO0O