The New York herald., 1921-09-25
FINANCIAL NEWS
AND COMMENT
Stock Market Irregular
Royal Dute.i Ofi-Bank Sur
plus Reserve Down.

Such irregular and indefinite move-
| ments Of stoc,ls as were seen yester-
day supply 2 record not unusual al
the end of a week of alternating waves
| OF weakness and strength. There was
considerable profit taking In issues which
gained ground on Thursday and Fri
day and this. coupled with bear Demon
strations among oil shares. made the
list at the end OF trading seem more
heavy than firm. The changes, however,
were meaningless on the whole. No cx-
PLANTATION for pressure against Royal
Dutch, causing a fall OF close to 8
points, appeared either IN the oil trade
news or in technicalities OF the specula-
tive situation. The rails were firm for
a time. but drew back slowly near the
four.
The week ended with bonds contin-
uing to stride forward under an i'm
petus which has been we'll explained by
the action Of money and Reserve Bank
rediscount rates. Liberty bonds were
bid upward 10 new high points for the
movement, with the exception OF the
3ias which while firm were In smaller
demand than those carrying a higher
coupon. The Liberty group has, OF
course, been under the same influence
as other funded issues. but the persis-
tence of the demand has been SO pro-
nounced in the last fortnight as to raise
Inquiries among bond men about the
causes outside OF the money situation.
Evidently the Encouragement OF tax ex-
emptions on holdings of Government
bonds az proposed In the forthcoming
revenue measure and the prospect OF
lower surtaxes are bringing In a lot OF
buying.
In connection with money, the New
York Clearing House bank statement
showed one reason why the cali loan
rate was quite high during the week.
A reduction OF s6s,oO0.o00 in demand
deposits, reported in the statement OF
the same time that loans increased
s5.300.0o0, indicated substantial flow
OF funds away from New York. The
effect Of the weeks large reduction Of
Bank was disclosed In a fall of more
than S31 800. 900 In member banks re-
serve credits at the central institution
and brought about a decrease of nearly
IT,
There is likely to be a growth of re-
discounts in the current week--the usual
procedure q fortnight after tax date
but all the signs point toward gradual
cutting down OF such loans in the next
month or longer. depending upon the
state of general business and the speed
with which the balance of the crops is
marketed.
Cotton fluctuated over . fairly broad
range. but finally ran into substantial
purchasing orders and left Off about
quarter cent a pound higher than It did
on Friday. The outlook for that market
remains somewhat obscure by reason of
the lack of means to estimate consunp-
tion at home and abroad during the
winter. Also 1t remains to be seen
whether marketing will be hastened for
a considerable time by the needs of grow
ers to reduce commitments TO banks.
1t is possible to conceive OF a bank
ing situation 50 improved that sales OF
cotton from farm and warehouses will
slacken. which. provided that the de-
mand should remain active. would bring
about upward price swings
The promise for this week is OF
further large expansion of new security
offerings. The presence Of the most ac-
tive demand for bonds and notes since
the war loan campaigns were completed
carries its own suggestion Of an out
put of offerings until the market reaches
a period OF saturation.