The Bridgeport times and evening farmer., 1920-02-18
IL. WATSON'S
 WEEKLY LETTER

Indications of decline in foreign trade, following the fall in exchange on Europe, combined with evidence of the beginning of commercial liqui- dation in the United States, to say nothing of revival of unsettlement over the railroad labor situation, have considerably promoted bearish senti- ment in Stock Exchange circles, with a result that irregular1ty and read justment have been and are likely to continue to be prominent in the market for securities. There Is no doubt that decline in prices and re- auction of business volume are fac tors that will increase the supply of loanable funds; but rates for time money are still high and reflective of scarcity, and they prevent bullish operations in stocks from going be- yond short covering rallies, more or less sharp, accordingly as the issues concerned are limited in floating sup ply or overso1d by the bear element. Plans to stabilize the call money market are expected to modify the violent fiuctua tions heretofore e2peri- enced from hour to hour, but they cannot increase the supply of fluids, and 1t is this feature. by which the market has been handicapped for sometime past, as stated in these let ters. Liquidation of securities in the latest declines has to some extent re- lieved the situation, but the proceeds from such selling have to a constd-
 erable extent gone into commercial lines to take the place of loans with drawn therefrom by the banks on ! 567. this money, while released from se- | curities, does not find it's way 1mme- diately into the call market.
 Developments like the ratification | of the peace treaty-which outlook seems more hopeful-are expected to 1 provide incentives for retirement of bear contracts because they mark 1 economic steps toward the return of normal conditions; but when exten- ] sions of movements i\a considered be- yond the limits to which prices may l be carried upward by short covering, i it is necessary to secure the backing of ample supplies of money-which,
 as before stated. are still lacking and | may not be available for a time. Where specific reasons exist justify l ing speciality advances and sufficient l funds are had for the purpose, rise in certain stocks are not likely to meet definite opposition.
 Presidential election campaigning has already begun, with the most conspicuous feature developing up to
 this time being found in the organized l labor announcement that it will con- , centrate it's efforts to defeat candi-
 dates for Congress who do not favor it's propositions. While not all ot the 100000 members of the Amer ican Federation of Labor are voters
 the union will have great power il
 it's leaders can hold their followers
 togethe which has no
 been possible politically herexfore
 however It is not expected that tht
 labor threat to strike and tie up thu be put into effect. for the reason tha it might prejudice labor's election appeal to the people. Discussini ;; tendencies toward combination Speaker Gillett of the House of Re presentatives questions whether grea combinations of employees are not l worse menace to the country thal those of employers.
 More attention is being given i K financial circles to the currency de , preciation of foreign countries, and r is being referred to as powerfu , i factor in the movement toward lo7 ' levels by foreign exchange rates. : s British authority holds 1t largely re |. sponsible for the high cost of Twin = and general imitation. Gold export
 from the United States are mentione
 as reducing the liquid supply of car = itaI in this country; but this may |
 offset by the increasing supply (
 money accommodating as a result (
 liquidatlan in commercial circles :
 well as through reduction of Jo-s-' o
 securities in Wall Street IT 2 U.
 Steel Corporation has reported ar
 other increase in thrilled order
 which shows that consumers continU
 to make large demands on the stet
 producers.