New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-09-13
Developments of the Week
and Their Bearing ON
the Outlook

in stocks early last month and the
recovery since have created more
cheerful psychology in speculative and
investment circles. Although many
traders feel that the lowest level Of
security prices of the year has been
passed, very few even Of the optimistic
look forward to broad and spectacu-
lar bull market this fall. Even those
who foresee higher prices are not
ready to believe that during siege Of
tight money it will be feasible to make
an impressive bullish demonstration.
Unless the pyrotechncs of q bull
period are available, the market can
not hope to make its maximum appeal
to the outside public. In recent weeks,
however, there have been evidences Of
buying for reimbursement purposes
by discriminating outsiders in the
role of bargain hunters. However,
considerable outer rim of the stock
buying public which overruns the
marketplace after a sustained upward
movement of securities has a tendency
to wait until it is sure that big swing
is under way. Broadly speaking, this
group enters the market late and usu-
ally remains too long-until after a
reaction has set in. At present the in
terest of the public in the market is
limited, but the absorption of good
bonds by persons of moderate means is
an encouraging sign
Slightly easier money market con-
Gitions confronted Stock Exchange bor-
bowers last week. In the first place
the banks were somewhat more libe raj
with their offerings of call funds,
which resulted in the loanng rate
dropping on at least two occasions to
6 per cent. Renewals, however, were
generally made on "a z per cent basis.
But the most interesting development
in money was the appearance of time
funds. For the first time in weeks
lending institutions offered small
amounts of money for fixed periods.
The rate was high, S1s to 81 for
four months loans. But the signifi-
CdIe IAlluS oDouI ~ Was tlldI INc DdIh6
we're willing to make time loans at
all. The policy for many months past
has been to force the stock broker to
finance all his operations through the
medium Of the call money market. 1t
was natural therefore to consider the
appearance Of offerings Of time funds
as an expression of confidence on the
part of certain elements in the bank
ing community in the inherent strength
Of the financial situation and the
ability of the banks to meet the alb
normal needs of the fall season now
ct hand.
Around the trading posts on the
floor of the exchange uneasiness was
registered toward The close of the week
ments. Specifically, there was little
in the reports of conditions to justify
the fears. On the surface, the Reserve
Bank here reported an improved re-
serve position. The gain, however,
represented strategic bookkeeping OPP
the strain of the crop-moving period.
The switching of funds recalls again
that the Federal Reserve system is
unity and that the important index
of conditions is the combined state
ment and not the report of any par
ticular regional bank. There are many
devices under the act for modifying
reserves at the places most needed,
and this capacity is one Of the essen
tial virtues Of the system. The de-
mands that the movement Of the prod
ucts of the soil from producer toward
were anticipated, and the resulting
seasonal conditions are we'll under
stood.
On Wednesday mud will be stirred
in the financial waters. The third in
stallment of Federal taxes falls due, an
issue Of $65O,0O0,O00 Of certificates Of
indebtedness will mature and new GER
tifcates will be offered to investors.
The movements of funds, now thor
oughly routine in character, may be
reflected temporarily in uneasiness in
4 the call money mart.
AS technical job in the creation Of
bonds, the work of the underwriters Of
| the new French loan Of $100,c00,000
| deserves special mention. From first
to last the bond was designed to ap-
peal to the American investor under
existing extraordinary conditions. 1t
is difficult to conceive under existing
conditions of French bond (within
the boundary beyond which France
would not make concessions) which
would have been better seller. The
oversubscription Of the issue within an
hour after the books formally opened
measured the enthusiasm of the popu-
lar response.
The twenty-five year maturity is one
Of the most appealing features Of the
new issue. M. Parmentier, who ne
gotiated the loan. was at first inclined
to ask 3or q five-year issue, but the
i bankers insisted that the market had
| been flooded with short-term issues