New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-08-29

lney rejected technical changes IN the
zation of the market place itself
After much ado in the matter, pre-
cipitate declines during the most of the
week, followed by robust rally, net
price changes on the average were
slight. AS the market closed on Wcdncs- /
day The Tribune's average of thirty
representative industrial stocks was
at the lowest level quoted thus far in
1921. BY o'clock Friday, the average
was 1877 points higher and many par
ticularly active stocks had gained five
points.
The change from falling to rising
quotations originated out Of the very
nature of speculation itself, rather
than from some news event in the out
side world. The downward swing
lasted three weeks and before Thurs
days moderate rally the decline had
been uninterrupted for six days. The
short interest kept piling up, with an
increasing number of stocks lending at
premium and the market was in what
Wall Street calls an oversold condi-
ton. Only a spark was required to
set afire flame of recovery. The dec
laration Of regular dividends BY Gem
eral Electric and Railway Steel Spring.
tho reported improved tone in the steel
industry, the striking further better
ment in fundamental credit conditions
and marked strength in cotton quota
tions were elements that helped to sup
ply talking points to those who felt
impelled to take profits on the short
side OF the market.
additionally, tho public is supposed
to be inclined toward the view that
prices are going up. After sustained
declines outsiders abstain from specu-
lating for time and periods of dull
ness, such as the market has been
passing through, ensue. True enough,
during downward swings, profits are to
be made out Of falling quotations, but
short selling belongs mainly to profess
sional spectators who understand the
intricacies Of the process of selling
what they do not possess. This is a
time, however, when precedent is ie-
nored and, though the public is for
the most part out Of the market, An
exceptionally large number of outsiders
have been speculating through short
selling.
Before the recovery rails, which had
withstood the selling pressure to which
the industrials succumbed, began early
last week to participate in the slump,
despite the publication of July earn
ings Of many carriers which revealed
substantial Improvement in net earn
ings as a result Of decreased expendi-
lures. Moreover, the House Of Repre-
scntatives adopted the funding bill.
embracing the Harding plan for aiding
the railroads, but it was indicated that
the Senate was disinclined toward
quick action on the measure.
There was time during the martial
days when the signing Of peace be-
tween the United States and Germany
would have thrilled the nation enor-
mously, but the event itself was &C
cepted as mere routine occurrence
last week. The financial markets To-
nored the contamination, which had
been fairly we'll discounted. Neverthe-
less, the actual signing constitutes
landmark in history and on the eco
romic side marks an important step
toward normally.
although normally this IS the season
of the year when the interior of the
country begins to draw upon New York
for funds to be used in helping the
farmer harvest his crops and start
them on the way to the world markets,
the movement thus far has failed to
show IN the local banking position. Evi
IDENTIFY the interior will not call upon
New York as heavily as 1t has in re-
cent years. On the other hand. it is
possible that the flow Of funds to the
interior is proceeding normally, but it's
effects are being counteractcd hy cur
ccnts moving in the opposite direction.
The Federal Reserve Bank of New
York In its statement of condition
last week, revealed large gain through
the gold settlement fund in Its oper-
ations with other Reserve banks;
whereas, were there any pronounced
drift of funds to the interior It would
have been reflected in substan-
tial loss. The bankers have been
holding all along that the crop
moving seasons financial require
ments would be met without any diff
Guilty whatsoever this year because Of
the much strengthened banking posi-
ton generally. Moreover, the amount
Of money required to move crops is
much less than it has been in other
years as result Of the shrnkage of
market values
Last week the pressure upon lending
institutions here was lifted and Wall
Street again enjoyed period Of mod
crate ease In the money market. At
the Stock Exchange brokers seeking
funds to finance speculative and invest