New-York tribune., 1920-06-22
Call Money at IL
p. c.. Halts Rise
In Stock Market
Banks Call Loans to Better
Their Reserve Position;
Street Talks About Huge
Gold Imports

Soaring rates for call money smoth
cred any bullish propensities which the
speculative element in the stock mar
ket may have had yesterday. Banks
called loans rather freely in the after
noon and the rate jumped to IL per
that had set in in the early hours
halted, prices yielded and the market
turned exceedingly dull.
But no great amount of selling came
out, even with all the stiffness in call
money. Experienced market observers
argued that without the drag of the
high money rates to check speculative
operations for the rise better mar
ket might have been expected, espe-
cially in view Of the circumstantial re-
ports that the British Treasury is ar
ranging to ship approximately $780,
100000 in gold to New York in the
course of the next three months.
The jump in the rate for call money
after renewals had been made at per
cent was obviously due in a measure to
an effort on the part of the local banks
IN the statement at the end Of last week
had disclosed deficit of more than
$3,O00000. The Street was naturally
disposed to look upon the statements
OF the Federal Reserve Bank of New
York and the system at large, which
showed substantial improvement, as
being OF much greater Importance than
that of the local clearing house institu-
tons, but the favorable effect was more
than offset by the run-up in money
rates.
The weekly report covering the COM
bined operations Of the twelve banks
in the Reserve system showed in strik-
ing manner the effect upon the banks
OF the huge juno IS financial transac-
tions. There were redeemed last week,
for example, in all $7OO,0OO,OOO in tax
| certificates, while at the same time
new certificates of indebtedness were
placed aggregating more than S419, 9,O0O,-
OO0. The redemption Of the certificates of
course made it possible for the member
banks throughout the country to make
| heavy inroads into their indebtedness
to the Reserve institutions, so that the
combined statement disclosed a con-
traction in redscounts of government
war paper we'll in excess of $2O0,000,-
900. or this reduction Of 100000, 900
the New York Federal Reserve Bank
was responsible for more than $780,
00O 900.
Prospects Of any important easing
IN the money situation at this center
| before the end of the month are not
bright. This is season when
normally the demands upon the banks
Incidental to the huge end of the half
year settlements reach extremely large
proportions. 1t is estimated that the
interest and dividend disbursements
around the July / period will alone
approximate $35O,oOo,O0o. These funds
are drawn out of the banks and it
takes time for them to flow back into
the regular channels of business again.
A similar situation existed around
June Is, and checks drawn for income
tax payments, interest disbursements
and other financial transactions are
just beginning to come back.
Indications of another large move
ment in gold from England-the Street
is talking confidently of shipments ag-
gregating at least S100, ,0OO-have
served to instill fresh hopes into the
tullish contingent in the stock market,
which continues to argue that the ar
rival of such a great amount of gold
might easily work complete change
in the complexion of the domestic
money market. There apparently is
basis for the report of a resumption
Of the gold import flow. Bankers in a
position to know say they would not
be surprised to see s50000,0OO or more
forwarded in connection with the
Anglo-French loan maturity in Oc-
tober. Rising. strength in sterling ex-
change. with further improvement yes
terday. is held to be due to the knowl-
edge in financial quarters Of such i'm
pending gold consignments.