The New York herald., 1921-02-06
FINANCIAL NEWS
AND COMMENT
Retiring Of Short Contracts
Gives Firm Tone to Dull
Stock Market.

The retirement of short contracts Ina
parted a hrm tone to a decidedly dull
In fact several issues. including Ameri-
can Hide and Leather preferred, Ameri-
can Woolen. Mexican Petroleum and
Houston Oil. were in sufficient demand
to bring net gains of point or more.
The market seemed to be almost entirely
in the hands OF the professional trading
element. and for that reason the ex-
pectation of an early announcement of
the Reading Conipanys plan for segre-
cation of properties was reflected in a
strong price trend under fairly large
buying orders. But outside OF the
shares mentioned business was too fat
to indicate any definite direction OF trad
ing opinion. The foreign exchanges were
firm. including the German rate. in spite
Of Lloyd Georges reported statement
that Germany must disarm and must
pay. The direct inference from the
cabed words of the British Premier was
that the allied Powers were standing
firmly upon the plan for a sliding scale
of annual payments by Germany for
reparation account over a forty-two-
year period. The cotton market was
firm, net gains running up to so points
and wheat prices in Chicago were steady.
The last week brought few significant
movements Of securities. upon which
basis could be had for estimating the
points from Monday morning to satur-
day noon were recorded by many active
industrial shares and several of the rail-
road group lost ground What the
week showed was that any effort to bid
prices upward is likely to head into
frightened money situation until the re-
lease OF credit, CONCEALED in merchandise.
has gone further than at present The
railroad prospects for reduced costs will
probably become clearer next week.
when the Labor Board has opportunity
to make known the procedure it intends
to follow and there should be shortly
demonstration of the attitude OF railroad
employees toward proposed measures for
reducing their incomes by eliminating
wartime methods of handling the pay
envelope. The settlement of the railway
controversy doubtless will take some
time, and what is of more immediate
interest to followers of stocks is, per-
haps, the money situation.
The week end bank statements en-
phasized the rather tense position of
money. which was indicated In the high
call loan rates Of the last three days.
Member banks rediscounted Government
war bonds and commercial paper ex-
tensively. the increase over the preced-
ing week being $36.000,000 For the
first time in seven weeks there was an
increase instead of q decrease of out
standing Federal Reserve notes. the
weeks gain being sS.70o,ooo. The Re-
serve Banks total reserve was $5,400. 900
larger than I'm the week before. ac-
counted for almost entirely by an ex-
pansion of gold holdings. Through the
gain Of gold. an increase of $1S.70o. 0o9
in net deposits and the growth of circu-
lation was so far Offset that the ratio
of cash to deposit and note liabilities
declined only from 3s.3 to 3s.1 per cent
The statement OF the Clearing House
banks was rather interesting in respect
to the movement of deposits. Through
the large borrowing at the Reserve
Bank. net demand deposits reported in
the average statement were expanded
S17. 1000 900. but before the end Of the
week there evidently was heavy draft
institutions for the report of actual con-
ditlon on Friday afternoon disclosed
net decline for tine week of ssss.0o0.