New-York tribune., 1920-01-22
Stock Market
Dull Spite of
Cheap Money
Lowest Renewal Rate of Sew
cral Months Fails to Slim
ulate Trading; Slump III
Foreign Exchanges

Professional SPECTATORS found little
reason either for buying or selling
stocks yesterday, especially after sew
eral attempts to bull and bear prices
had proved Intellectual. The result was
1 that trading was exceedingly dull AL
most throughout the session, the turn
over being less than 100000 shares
! changed hands. The proceedings were
cnlivened little right at the close by
sharp drive against prices, but it
made relatively little Roadway, and the
net results of the days transactions
were not Important. Save in a few of
/ the fast-moving industrial specialties,
price changes We're small.
I Money opened and renewed at 6 per
cent-thc lowest renewal rate for sew
eral months-and remained at that fig
urc all day, but the stock market made
little or no response. Traders were
inclined to regard the current money
ease as transitory, and therefore were
not willing to accept the low rate as q
convincing reason for buying stocks. At
the same time, cheap money, however
transitory it may prove to be, worried
those working for lower values, and
therefore had a tendency to check short
sales, especially in view Of the over
sold condition which some brokers say
exists in good part of the list
1t seems evident that only some i'm
portant development of a positively ia
vorable or unfavorable character, such
for example, as the enactment of sound
railroad legislation, will arouse the
market out of the state Of lethargy into
which it has fallen. The public shows
little or no disposition to take part
in dealing, and, Hacking public support,
professional traders hesitate to commit
themselves in an extensive way on the
long sido, especially in view Of the
numerous uncertainties in the general
business situation. Operations on the
short side have been large during the
last two weeks, but since liquidation
has dwindled the bears are finding it
hard to make further progress. and the
pressure therefore is becoming gradu-
ally less pronounced.
The most unfavorable feature of the
days news was the continued decline
Of the foreign exchanges, particularly
sterling exchange, which fell to a low
record. American banks arc now car
rying about all the paper arising out
of sales to Europe that they can handle
under present conditions. 1t is esti-
mated that Europe owes this country
on open account between S3,000000,000
and $4,000 100000. and bankers as
sert that this marks the limit, unless
ihe Federal Reserve Board should re
verse its policy of bringing about
credit contraction, which is extremely
unlikely. Therefore, every European
purchase in this market hereafter will
porbab'y be reflected in further weak
cning Of the foreign exchanges.
The slump in exchange rates, if car
ried far enough, will automatically cor
rect itself by making the cost of Amer
lean products SO high that the Euro
pean consumer will stop purchasing,
but that means q further reduction in
our trade balance. Such a reduction
could hardly fail to have an ednfavor-
able effect on business conditions here.
That is one important reason why SO
many spectators, taking the long
range view, are inclined to be bearish.