Evening star., 1927-07-31
INTEREST CENTERS
ONSTOCK MARKET
Some Bankers Look on Soar.
ing of Shares With No
Small Concern.
BY GEORGE T. HUGHES.
Special Dispatch to The Star.

SpeCiai Dlspatch to The star.
NEW YORK. July S0.-F'inancial in.
terest during the week just closed has
centered upon the phenomenal rise in
prices on the Stock Exchange. Atten-
ton has been paid to other matters
only insofar as they were connected
with the speculation in stocks.
The spectacle of such representative
issues as u. S. Steel, General Motors.
Atchison and Allied Chemicals daily
making new high records has held
Wall Street enthralled. Many a sea
soned operator has withdrawn from
the market. out of all sympathy with
the proceedings. 1t is no secret either
that not a. few bankers look upon
these soaring quotations with con.
Germ. Nevertheless the movement per-
sists and practically without interme-
diate reaction.
Fundamentally, of course, the eX.
planation is the same that has been
advanced all through the rising mar
ket Of the year. namely. easy money.
Conditions in that respect have been
even more favorable this week to spec
ulation for the advance. Call money
has renewed at the lowest of the year
and new loans have been arranged
also at the years minimum. Rates on
bankers aCceptances have been cut
and time money has weakened. The
Federal Reserve statement shows the
same plethora of credit that it has for
months past. Moreover, the action of
the Kansas City Bank in cutting it's
rediscount rate has led to the expec-
tatlon that similar action will he taken
at New York, if not next week, then
very soon.
Anxiety Is Allayed.
All this has served to allay anxiety
about brokers' loans. The amount
reported by the New York City mem.
Der banks this week was an increase
of more than $4,000, 900 over that of
a week ago and brought the total up
TO the second highest point it has
reached since publication of the fig
ures began in 1926. The fact that all
the increase has been in demand loans
and not in time loans shows that il
IS stock speculation and not borrow
lnss by investment bankers to carry
unsold bonds that accounts for the
total. So we have the paradox of
more money being used to carry
stocks than ever before and at the
same time money rates weakening.
1t must be admitted that the semi
annual statements of the two largest
industrial organizations in the coun.
try. which were given out this week,
also have been a factor in the mar
ket. Added to this was the announce
ment that the du Pont Co. had
bought large stock interest in United
States Steel. Wall Street readily
argued that when business men pre-.
sumably SO well informed We're willing
TO invest money in stock at the high
rates now prevailing they were con-
ndent or the future and the man in
the street would do we'll to follow
thelr example. The market. then. is
forecasting a bright future for indus.
try as well as rejecting the super.
abundance of capital.
Trade and Money.
Looking to the future the only two
things to watch are for any change
in money conditions and any setback
in general trade. So far the market
mas ignored all indications of a less
favorable outlook in business. For
instance, railroad stocks have been in
no wise distributed by the June earn
lngs statements, which have been
making an unfavorable comparison
win the same month year ago. The
00oS Aoso DceH Hot SO much In gross
as IN net, showing that the carriers
are having more difficulty in coun-
teracting wage increases and other
rising expenses. If this trend con-
tlnues 1t may finally retard at least
the buying Of railroad stocks. but
nothing OF the kind has happened vet
Coming to bonds, there is not mIIch
to say. In general way unsold rem.
nants of new offerings arc ha;pg
cleared up and the market as a whole
shows the effects. There are large
buying orders for financial institu.
tions yet to be filled which prevents
any reaction in prices. New offerings
this week We're a little above those of
a week ago, but the total for July was
the lowest for any one month i'm
year. Much of the new financing is
for account of oil companies who must
have funds to store surplus petroleum
In this day of over-production.
Foreign issues are likely to figure
more largely next month.
Germany In Market.
Germany is again i'm the market for
money and, as the reception Of the
United Steel Works issue this week
showed, such offerings can be readily
absorbed, especially when there is a
speculative feature attached.
Commodity prices are stabiIzing. In
the weeks tabulation by Dun's Re.
view, out of 56 alterations there are
30 advances against 26 declines. The
puzzle is that with money so abun.
dant there is so little reflection of the
condition in the commodity markets.
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