The New York herald., 1921-01-01
FINANCIAL NEWS
AND COMMENT
Great Burst of Stock Buying
at Years End-Much Ac-
tivity in Bonds.

The year ended in the security mar
kets with a great burst Of buying. pur-
chasing orders being pressed upon the
brokers with insistence equal to that
behind orders TO sell few days ago.
Industrial stocks were bid upward from
2 to points. Railroad bonds, mainly
the lower priced issues. rose from large
fractions to more than points. The
markets gave their principal demonstra-
tion of strength early in the afternoon,
with a slight reaction toward the close
Of business, and. as the aggregate Of
transactions in stocks comprised more
than 100000 shares, it is fair to state
that the last day of 1920 brought forth
more than the casual covering of short
contracts.
That the retirement of commitments
on the short side had a part in the
vigorous upturn goes without saying, but
the surging advance. continued straight
along after some irregularity Of the first
quarter. suggested heavy repurchases of
shares sold in the last month as a
matter of record. A steady flow of So
called income tax selling went forward,
too, as evidenced by the large volume
of sales for cash. The power of the rise
was sufficient at all times to absorb
these offerings. with hardly any effect at
all upon the price level Stocks which
stood out with exceptional prominence
In the advance were some which had
been the weakest among the weak in the
decline of November and the first three
weeks of December. Among them were
American Smelling. American Interna-
tional. Cuba Cane Sugar, Houston Oil,
Mexican Petroleum, Republic Iron and
Steel and United States Rubber Rail-
road shares were inclined to lag behind
the others but were firm, and several,
including Northern Pacific, Seaboard Air
Line. common and preferred st. Louis
Southwestern preferred and st. Paul pre-
ferred, advanced l point to 2 points.
The strong trend of the market was
enough to impart n tone of cheerful
ness W tpHltiHpldllOU Oh llle new year
affairs. But caution still predominated
in surveys of business prospects in
banking quarters and the Street had
taken to heart the lesson of the recent
broad movement OF liquidation in
fashion that repressed exuberance over
the longer outlook. II was realized yes
terday no less than when gloom was
heaviest that there was much to be
done to reduce the credit structure to
a satisfactory position. and business in
practically all lines will need more time
to reach solid ground where price re-
ductions shall have attracted new buy
ing of goods and where consumers of
materials shall be possessed of new
vision.
The week end bank statements. issued
n day earlier than usual because of the
holiday. showed the results both of
preparations for end of the year needs
and of the natural ebb of demands for
currency and credit which appeared in
Christmas week. The Federal Reserve
DdnN. Whose gam OF EOlu through lne
intrabank settlement fund had been
large a week ago. lost s17. 500 900 through
this account and the gold reserve de-
clned $4,000. Gains in silver and
legal tender notes, however, as we'll as
an increase OF metal in the hands of
the Reserve Agent at New York were
offsets and the total reserve receded
less than s3.Oo0.Oo0. As net deposits
were only $4,000. 900 greater than they
were in the week before and outstand-
ing Federal Reserve notes declined $16.-
100000 the ratio of cash to note and
deposit liabilities was slightly higher
at 70 per cent. The ratio In the pre-
statement of actual condition of the
banks in the New York Clearing House
showed an increase of $4,000 in loans
and a decrease OF sl9515,oo0 in excess
reserve, this latter change being ac-
counted for chiefly by a falling off of
s17. 100000 in reserve credits at the Re-
serve Bank.
Call money lent at per cent Grain
and cotton went higher than on Thurs
day. following the trend of securities.
The foreign exchanges were firm dur
ing the morning. but later sterling and
other European rates settled back from,
their best quotations.
"