The New York herald., 1921-05-17
FINANCIAL NEWS
AND COMMENT
Stocks Recover Early Losses
Although Call Loan Rate
Rises to 7 Per Cent.

Professional traders overstepped them
selves yesterday in an effort to drive
stocks lower on the strength OF the
Silesian difficulty between officials of
England and France. for short cover
ing in the afternoon brought prices
back from low levels Of the morning
with a great deal OF force. The re-
covery was not retarded by an advance
OF the call loan rate from 6is per cent
to Z per cent late in the day because
hected merely heavy Government trans
actions and did not forecast per-
manently higher level for demand funds.
At the same time the money market
took cognizance of the current large
output of new security Issues and the
prospect OF much new financing in the
immediate future. There Is under con-
sideration by investment bankers
comprehensive programme of municipal,
Government and corporate financing,
which, IL pushed forward rapidly. may
bear down on call loan supplies during
periods of distribution although the fact
that several large issues are under ne
gotiation discloses confidence that
money conditions will be favorable for
considerable time.
The stock list at the close of business
contained many net gains OF point to
as much as 8 points, such issues as
ternational Paper. Studebaker and
United States Industrial Alcohol being
more prominent than others. Those
names suggest that last weeks pressure,
than elsewhere. had formed a cushion
from which prices rebounded rapidly
once short covering began. Rail shares
as whole were mixed in their price
changes. New York Central, Lacka-
wanna. Reading. Southern Pacific and
several others gaining ground coincident
with declines Of many companion stocks
The railroad department has come OF
late under the influence OF comment
about dividend prospects. which in trad
ing estimation appears to have more
than counterbaIanced earlier expecta-
tions Of relief to railroad costs through
the Labor Boards pending ruling on
wage rates.
The reduction OF the Dallas Reserve
Banks rediscount rate from z per cent.
to 61a per cent places all of the re-
serve institutions on either 615 or a
s per cent basis. AS the Dallas bank
deposit and note liabilities Of 3s6 per
cent, in contrast to rates Of other in
stitutions ranging from Ais to 70 per
cent. 1t is indicated that the policy Of
the Reserve Board to cheaper credit all
over the country for stimulating busi-
ness has not resulted in unsound infla-
ton anywhere since the cuts began in
Boston more than a month ago. Other
wise action at Dallas might have been
delayed. 1t is conceivable that addi-
tional reductions will come shortly, but
| the strong position of open market dis
counts hardly suggests that the time is
near when Reserve Bank rates will find
themselves above and not below those Of
the public market.
Holidays in London and Paris tended
to restrict dealings In foreign exchanges.
In the absence OF directing forces from
those centres 1t was difficult to decide
whether political differences over Po-
lands attitude in respect to Silesia was
really potent in bringing about recess
sions in sterling, francs and marks
sterling at 81 to the pound the quota
ton for sight drafts got down to 3.991
while francs receded from $50 to 8.451 u,
and marks ended the trading session at
- cents each, against 1.75Z cents on
Saturday.