The New York herald., 1921-01-14
FINANCIAL NEWS
AND COMMENT
Reaction Affects Broad List of
Stocks-Call Money Re-
news at 6.

Through broad and fairly extensive
reaction yesterday the stock market
showed the effect OF the retirement OF a
heavy short account since last Monday
morning. The course of business gave
more evidence. IL any was needed, that
dealings since the opening OF the new
year had been mainly IN the lands of
professional traders. AS soon as prices
began TO display an uncertain tendency
early in the session II was evident that
fresh pressure was developing. and the
resultant decline was continued prac-
tically throughout the remainder of the
day. Net recessions extended from I
point TO more than 2 points. and few
steel, leather. automobile and miscel-
laneous stocks lost more ground. 1t
was not altogether surprising to see
Crucible Steel react more than points.
as retreat of the shorts so precipitate
as on Monday and Tuesday was bound
to carry the quotation higher than con-
dItions warranted.
It is evident. through comment In
banking circles, that the money market
outlook continues to puzzle many who
participate in the making of loans. A 6
per cent. renewal rate for call money on
the Stock Exchange yesterday. for the
first time since the end of November,
showed that the official market was TAX
inc nF "a tpo
lower rates. and there were reports Of
easement Of collateral time loans from
6A to per cent. But, despite the indi-
cations Of freer state of money in the
collateral loan market and in discounts
of acceptances, It Is notable that surveys
of future prospects are by on means
unanimous In predicting a permanent
decline of rates Presumably the fact
that commercial paper remains rather
firmly fixed at tx and per cent.
strengthens some doubts about the out
look, and In quarters where mercantile
loans are studied 1t is predicted that
much more liquidation In commercial
channels must be put through before
money and credit can be considered
really loosened up. However, II seems
from preparations under way for sub
stantial new security fotations IN the
near future that investment interests
look at least for satisfactory state of
money, and the gradually rising ten
dency Of corporation bonds records a
similar expectation. At the same time
that railroad stocks were edging down
ward yesterday many funded issues of
the carriers. exclusive of convertible
bonds, were firm. The Liberty bond
market disclosed a heavy tone early in
the day. which left prices irregular
though not greatly changed at the close.
The days news and events In busi-
ness and Industry contributed little to
sentiment toward the financial markets
The foreign exchanges were directed al
times by the same speculative tendencies
evident in stocks. disclosed chiefly in the
effort TO turn quotations downward. But
II was plain from the start that real
offerings Of bills were light and rates
came back from morning levels in a
positive fashion before business ended
Sterling was quoted in the bid price as
low as 3.69 In the initial hour. level 9
cents lower than Wednesdays last price,
but endeavor on the short side met witt,
such small success that spectators
turned about shortly and the rate left
of with a net Improvement of u cents
at s.73ia for checks.
Because Of the current interest In
money and exchange developments the
Bank of England's statement was ex-
amined closely. A decline of f34 900. 900
in loans. with consequent falling off
Of f32.600. 600 In deposits. was the most
important influence behind an advance
in the reserve ratio from s.s3 to 1918
per cent The gain OF nearly per
cent. from the minimum figure of many
years. reported a fortnight ago. was in
line with quick recoveries after other
periods of unusual demands OF the war
period. but the ratio was still AZ per
cent. lower than year ago.
The reaction of stocks appeared to
have reflection in grain and cotton. just
as the recent strength of securities had
influence on the upward side Of these
markets Grain declined 2A to 3A cents