Evening star., 1923-02-23
POOLS WORK HARD
! T0KEEP PRICES UP
Raising of Rediscount Rate
Causes Worry Among Wall
Street Spectators.
BY STUART T.. WEST.
spec,al DISPATCH to The Star

Special Dispatch to The Star.
NEW YORK, February 23.-The
professional view of today'S' stock
market was that the pools had been
taken aback by the action of the re-
serve bank, yet were making bold
stand to discourage any general sell
ing of stocks. One set of traders was
suspicious, saying that the market
was being held up by main force,
while another set laid stress upon
the point that stocks could not have
been distributed in any large way
anG behave as they did today.
What happened was that after an
uncertain opening and some decline
during the first hour. a dozen or so
of the speculative leaders were take
in hand and bid up. This maneuver
had Steadying effect upon the rest
of the list, but was not sufficient to
restore the buoyancy of the early
part of the week.
Sugar Stocks Prominent.
Following another rise in the price
of raw sugar and corresponding
advance in refined, the sugar stocks
came i'll for attention again.
American Wool made a new high,
partly as the result of favorable esti-
uldItS IeSd1ulllS earnings anu parity
IN consequence OF the announcement
that three more of the principal lines
of fall goods had been oversold and
Withdrawn from the market
When it came to turning prices
upward after the early period of un-
settlement it was stocks like Stude-
baker, American Can and American
Locomotive-all of them easy to con-
trol--thata were selected as the
leaders.
Those who were active last week in
passing out information regarding at
least a Sc dividend rate on Gulf States
Steel said today that the 81 quarterly
dividend declared last Wednesday
meant to them that the rate would
be increased at the next meeting to
$3.50 quarterly and at the meeting six
months hence to at least 50 quarterly
and perhaps $3.50 quarterly. At the
same time that the 81 dividend that
was declared on the common stock
the board of directors set aside divi-
dends for the entire yeaP on the first
and second preferred issues.
BroOkIyn-EdisOn Popular.
Not more than 1 per cent of the
s15.000,OOO stock offering of the
Brooklyn Edison Company was left
to the underwriting syndicate, 80 pei
cent having been subscribed to by
stockholders. Up to the close of busi-
ness on Wednesday more than S14.-
the offering. Estimates are that the
syndicate will have only about SOC
shares to underwrite at 500 share
Advices which might be termed
semi official are that there is very lit
tie likelihood of any dividend being
declared by the Ontario and Western
directors in 1928. Stockholders have
been expecting some action for at
least a year, and most dividend sheets
still show Ontario and Western a
trr-o In1 hac hnn
extremely hard hit by strikes coal
troubles and bad weather. During
this winter the Ontario and Western
has been more snowplow than rail-
road, having had to keep it's track
clearing apparatus at work nearly
every day.
Review and Outlook.
The effect of the raising of the
New York Reserve Banks discount
from to 4 ~ per cent upon todays
markets was felt chiefly in the in
vestment section. Liberty bonds. as
the principal collateral for non-com-
1nercial loans, promptly adjusted their
prices to the new level with a drop
of 80 to so cents on the 800. Cor
weak, but they were off very gen.
orally. The bond market took the
! reserve banks action as an official
! confirmation that the downward
J movement in interest rates, which ran
from June, 1920, to September, 1922,
was definitely over and that the
principal force in raising investment
values had finally disappeared.
With the speculative stock market t
IL was a question how much of an
element of warning there was in this
increase of the discount rates. On the
whole the answer was that if the in
tention was to restrain speculation,
whether in stocks or in commodities,
1t was comparatively minor motive
IN the minds of the bank directors.
Mainly the advance from A to 41a
per cent was the readjustment of re-
discount quotations in the New York
and Boston districts to those prevail
ing in other sections of the country,
Caused Decline in 1919.
recognizing at the same time that
the outside market for commercial
papers has been slowly hardening un-
der the influence of expanding trade
demands so that rates at present are
half per cent higher than they were
, last summer.
Yet with all that was to be said
on these lines and with all that was
TO be said about the very much stronger
position of the federal reserve as COM
pared with November, 1919, the facts
stood out prominently that it was the
raising of official rates on the latter
occasion that precipitated the Wall
Slitet utcIlHt. ulS pIONlueu dL ltt1Sl
g. sentimental test for a speculative
movement which had been going with
only slight Interruptions for nearly
three months. and which more recent
1y was becoming rather obviously ex-
cessive in some directions. The essen
tial difference from purely stock mar
ket standpoint between conditions to-
day and those in the autumn of 1919 was
that the public had the stocks, whereas
now whatever distribution by the pools
and banking interests has occurred, the
process apparently has not been COM
.pete. :
Studebaker in Sharp Rise.
The pool in Studebaker, with the
help of the favorable annual report
and the highly optimistio estimates
regarding current earnings, made a
very strong showing for it's stock in
the afternoon. Baldwin Locomotive
however, was quite weak and proved
an ample offset to the strength OF
Studebaker. 1t looked in the last
hour az if the earlier operations for
the rise had not been successful in
securing the following which they
had in the first part of the week
ASIA rule copper shares failed to
respond to the further rise in the
prica of the metal and the replace
ment of Inspiration Copper on a
divid erd basis.
Call money went to per cent
toward the end of the afternoon, but
although this was further sign OF
diminishing supplies of money avail
able FOR speculative purposes. it had
little effect upon stock exchange.
Copyright, 1921