The Washington herald., 1920-07-19
sSHARP MARKET
RALLY FORSEEN
R. R. Labor Award Awaited
To Change Trend Of
Trading.
VITAL CHANGE FEARED
Higher Freight Rates Ex-
pected to Compensate for
Wage Increase.
VITAL CHANGE FEARED

New York. July 1S.-Such devel-
- opments are expected in the next
week that professional Wall street
Is looking forward to a sharp rally
In the stock market. There Is no
short interest worth talking about.
but the traders believe stocks are
SO strongly held that selling orders
will not appear until there is a con-
siderable advance
They believe this because nearly
everybody is carrying stocks that
show losses. The reason they would
buy stocks now is that the Labor
Board award on Tuesday Is expect
ed to be such as will cheer up the
Workmen on the railroads. The
railroad managers expect the worst
from the Labor Board. but they
look to the Interstate Commerce
Commission for relief almost imme-
diately.
Railroad Condition Bad.
But unless the Commission an
nounces the raise in freight rates
promptly after the wage award Is
made. discouragement may cause
further selling. for conditions are
very bad indeed with the railroads.
1t Is true that freight Is being
cleared a little faster than it was,
but the congestion is still 50 great
that there is little hope OF cleaning
II UP before the heavy traffic of the
crop-moving period overwhelms the
country
The great crops that under nor
NAL conditions would be a reason
for buying stocks are this year an
embarrassment. Not only is there a
shortage of labor and of rolling
stock, but the cars as we'll as the
men are at a low percentage Of ef-
nciency. About 90 per cent OF the
cars are on lines other than those
of the owners and are not getting
current repairs. The number OF
cars in bad order Is now probably
q record.
Call Rates May Increase.
Conditions in the credit market
are still very bad. In the absence
Of Intelligent and patriotic handling
of the situation by the proper au-
thorities. individual bankers are
now trying to do what they can to
lhcUlSctpcS anu lnCiT CuSlOHl~
ers. The bankers are not bashful
about demanding bonuses. They
say the interest rates do not tempt
them. for some expect call money
to go as high as 40 per cent by Oc-
tober.
Inquiry among the banks that
lend to stock brokers discloses the
fact that more than a third OF the
tCta ia
for the account of Western banks.
Public stops Buying.
The fact that stocks are cheap In
comparison with their current
earnings and surpluses does not
save the situation entirely. although
that will help. The public is not in
a buying humor.
Woolen mills have shut down and
there is talk of other mills doing
likewise for lack OF orders-lack OF
orders at a time when the shortage
OF all kinds of commodities is the
greatest in all history. Such is the
absurdity to which profiteering has
come-not the profiteering of any
particular industry or individual.
but the profteering Of everybody.
Mail Orders Slack.
The fact that the mail order
houses find their business shrink
ing is evidence that the general
public has decided to quit buying
That looks as IL the loss was going
to fall on the manufacturers. That
means that big loans are going to
be involved. No wonder the banks
are conserving their resources and
preparing for shock