The Washington herald., 1921-11-20
MARKETS TRYING
TOSHOW APPROVAL
OF ARMS MEETING
Show Strength Despite
Small Chance of Early
Benefits.
STERLING IMPROVES
Better Conditions in Banking,
Money and Investment Mar
kets Outstanding Feature.

NEW YORK, Nov. 1s.-Bearing IN
mind the fact that the Washington
conference can have little immedi-
ate effect on business the markets
Of the week certainly tried hard TO
show their appreciation of the in
herent Importance OF the meeting.
Securities and commodities both
have made a brave show of strength
and although the logic of the exist
ing economic position proved rather
too much for a sustained rally, their
behavior registered encouragement
and approval. Sterling exchange
advanced smartly to better than 81,
the gain probably being accelerated
by short covering.
Improvement In Banking.
Improvement in banking condi-
tions and in the money and invest
ment markets continues to be the
outstanding feature of our financial
situation. Reserve ratios still rise,
interest rates gradually sag, and the
demand for high grade bonds is un-
diminished and impressive. Heavy
Oversubscriptions OF Treasury GER
tificates offerings have come to be
a matter of course, but the past
weeks scramble for the New York
Telephone Company's $50, 100000 Of
fering Of per cent bonds testifies
to a great latent supply Of invest
ment funds. Whether or not the
stock market develops the much
discussed reaction, lower rates and
higher bond prices seem to be among
the winters probabilities.
- Persons who prefer the fanciful to
the obvious have been spending con-
siderable time speculating on wheth-
-er or not banking interests" are
opposed to a rise in stocks lest II
spoil the existing favorable market
for investment issues. Whatever the
plans-of such interest. 1t is pretty
iclear that they don't have to worry
about the present bond market The
condition is perfectly natural and
Is not likely to be discouraged
Money Rates.
Money rates are falling because
old loans are being liquidated, be.
cause gold continues to pour into
the country, and because business 4.
still depressed. We have had a de.
layed or diverted panic. The blow
has been softened by our better con.
trail banking system. The result
however, is a retardation Of read.
justment. Instead of SHARP
smash, financial collie, have beer
prpstration and an abrupt fall In
interest rates, the whole thing ha.
been spread out over a year or so
only last summer did money rate:
give way fairly rapidly. With tn,
period Of winter slackness at hand
this movement should be acceler
ated- Trade uncertainty keeps tn,
public out of stocks. A good mar
ket naturally results.
May Be Seasonal Stacking.
The likelihood of a seasona
slackening in business meanwhil,
increases. Car loadings are falling
off slightly, and the demand fol
steel is smaller. Building opera
Jions, which have shown an encour
aging gain, are also likely to be af.
fected by cold weather. Saggins
cotton prices are having the effect
on the textile trade, and expor
business is restricted both by tn,
season and by European uncertain.
ties. Grain prices are distinctly un.
favorable to a recovery of farmers
purchasing power. Such a slacken.
ing Is not, however. disturbing; i
IS part of the years business
A secondary decline in cOmmodit,
- prices is, however, growing NOR,
probable Our best index of whole.
sale prices, that of the bureau OF
labor statistics, is 1.3 per cent lower
for October than for September
This is the first decline since June
and comedies, furthermore. with q
renewed decline in British prices
In both cases the predominatfne
influence is the fresh slump in farm
products The latter movement does
not, however. tell the whole story
since hve groups Of the bureaus in
dex have fallen, while three have
risen Price readJustments, further.
more, cannot be regarded as com.
plete as long as the index as a
whole stands so per cent higher
than before the war, while the
added cost amounts to 11s per cent
IN house furnishing a9ods, 90 per
cent in building materials, 90 ner
cent in clothes and clothing and 80
per cent in fuel and lighting. A
quiet winter is likely to bring fur
ther reductions in production costs