The New York herald., 1921-04-07
FINANCIAL NEWS
AND COMMENT
Stock Market Gets Stimulus
From Easier Trend Of
Money Rates.

The trend OF money rates toward
greater ease went further yesterday. en-
couraging the stock market forward dur
ing the morning. At the higher levels
of prices. some showing gains of to
points this week. considerable profit talk
ing came along and it looked as though
fresh endeavor by the bears was called
forth by the passing OF tho Midvale Steel
by sharp reactions OF the Central Leather
stock issues. In fact, much OF the after
noon trading was directed by renewed
consideration OF the industrial situation.
due to the factors mentioned. and owl
dence OF a more satisfactory money
situation was hardly sufficient to pre-
vent a great deal of irregularity OF quo
tations. The market left off, however.
with a strong tone in many parts of the
manufacturing company share list and
several rails. including Atchison and
New York Central. scored sizcable net
gains. A turnover In the neighborhood
of 100000 shares indicated plainly
enough that professional hands were
about the only ones engaged.
Despite the great expansion of reserve
and the decline of loans in the East
during the last three months. the Street
Is not forgetting that on two recent oc-
casons an easement of the money posi-
ton was only temporary and mislead-
ing to persons engaged in speculation.
The fact that the call loan renewal rate
OF 51a per cent. was the lowest since
October 81. 1919. and that the rate SUBJ
sequently went to 5 per cent, therefore,
was accepted with caution as a har-
binger of a permanent quotation under
per cent. Six per cent. money in these
times cannot be considered high. The
stock market community. however. has
seen so often in the last year 6 per
cent. rate easily altered into z per
cent one that It will take time for the
Street to become convinced that the call
rate can be held at 5 to 51s per cent
with so much liquidation still to be done
IN all the Federal Reserve districts and
with spring demands to be filled. 1t
would not be surprising il the New York
Reserve Bank assumed some of the loan
obligations of other districts In the near
future. increasing rediscounts here and
reducing gold credits through the iAtra-
| bank settlement fund.
The Midvale dividend action could be
looked at from two angles in so far as
It reflected current business conditions.
1t will be recalled that that company
was the first TO cut prices six weeks
ago. with the purpose. obviously, Of
stimulating buying. It's directors re-
ported that the first two months of 1921
brought deficits. and presumably the re-
suit in March was not satisfactory
Business has not been stimulated by
price concessions, but the question
arises. considering the second angle Of
the matter, whether there would or
would not have been Improvement II
the Steel Corporation had elected to 60
with the Independents In marking down
quotations. The feeling prevails that
some change In the attitude of the major
steel producing unit will appear before
the end OF the present month.
The weekly steel trade reviews GER
tainly were not hopeful OF trade re-
viyal under current conditions of wages
and prices in yesterdays presentation OF
comment. The production OF iron to-
day, says the Iron Age, is the smallest
on record in proportion to producing
capacity. the outturn being at the rate
OF 100000 tons month. In normal
years, before war necessities caused q
great growth of blast furnace facilities,
the country made iron to the extent Of
3s,000.000 to about 10000. 900 tons an
nually. The week has been marked by
a sharp contraction of Steel Corporation
activities in steel, production being only
45 per cent Of capacity. A week ago
1t was rated higher than so per cent