New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-04-05
Finance and Trade
Developments of the Week
and Their Bearing on
the Outlook

market last week were matted by fears
OF another money market squeeze. AL
though plainly primed for an advance,
with sentiment on all sides cheerful,
stocks churned about without getting
anywhere in particular. Call money
rates rose to IA per cent on one day. to
IL per cent on another, and the renewal
rate held around 8 per cent Here was
plainly reflection of an unhealthy con-
dition In the credit position which served
to take the edge off Of the bullish pro-
pensities Of the trading element, keep
ing the market in what Wall Street is
wont to describe as a professional trad
ing area" In other words, it was case
of professional swapping of stocks back
and forth. The public, a fairly active
participant up to few days previous,
apparently did not like the skyrockct
action Of number of the specalties
and stood aloof But the feeling was
one of confidence in values and the gen.
eral expectation at the beginning of the
new month is that the first signs of q
definite easing of money should bring a
quick response in the form of a resump-
ton Of the stock market rise
Probably tho most interesting devel-
opment, outside of the sensational turn
Of affairs in the market in Stutz Motors.
was the arrival Of $1s,o0o,ooO in gold
from London and adv1ces from the other
side that an additional s22,o00,o00 is
about to be shipped on British govern
mcnt account. This tends to confirm
the widespread though vague reports
of few weeks ago, that tho Britain
Treasury Is prepared to forward as much
gold as needed to meet the $500, 0QoyO 300
Anglo-French loan maturing O<teber
next. Such gold shipments as have
already materialized will helr in a
measure to build up our gold reserves
depleted through exporss to Sorhh Amer
lea and the Far East Sterling exchange
rates rose in striking fashion, at the
peak the English pound reaching value
of $500, representing at this figure a
recovery of moro than rs cents from the
low level touched earlier in the year.
This steady improvement in sterling. of
course, reflects England's efforts to get
back her former position Of supremacy
in the world markets. Bankers return
ing from the other side stress the
extraordinary recuperative powers being
displayed by the British, pointing out
that England Is now Just about paying
her way in international trade, whereas
it was matter Of only few months
ago when the balance of trade was
heavily against her. Unfortunately, the
position Of tho European countries is
not so satisfactory.
Though gold is tho cheapest commod-
ity in the market, since 1t Is valued at
the same fixed rate as before the war,
money, or credit, like all other things, is
now commanding an unusually high
price. In the improvement of the abb
sorptive power Of the investment market
manifested in the last fortnight there
has been furry of new offerings. The
average return to the investor was at
least 7 per cent. The cost to the Dor
rover was significantly higher, particu-
larly since the charge for underwriting
has doubled. A borrowing corporation,
particularly II 1t happens to be rail-
road whose unrestricted earnings are
limited to about 6 per cent under the
Esch-Cummins act, now has to think
twice before Offering new securities. It.
must determine whether the accomm s.
dation is worth the cost. The high lie oe
Of interest rates is universal. A British
industrial corporation recently offered
preference shares at price to Yield IL
per cent The destruction of capita
during the war and the present Scramble
for what is available have set the law
Of supply and demand to work.
In the process Of inte<nationalizinp
Wall Street q growing demand for Flu.
ropcan internal obligations is creating
new type Of business. 1t has been es.
timated that more than 100000 is now
going each day into bonds that were
originally intended for home consump.
ton in the European nations. Ameri.
cans, eager to speculate in foreign ex.
change, are buying the Intervals in the
hope that pounds, francs, lire, or marks
will be nearer the pre-war normal al
the time the bonds mature than the,
are to-day. In the hope of huge profit:
thew are assuming preatcr r;oto +bo,
tho purchasers of especially safeguardee
external obligations Of the same coun
| tries. II they enter the transaction with
full knowledge Of tho mechanism in
XolXed thera ha ~ A.