The New York herald., 1921-11-05
FINANCIAL NEWS
AND COMMENT
Heavy Bond Trading ontinues
With Years Largest Total
Preferred Stocks Up.

Stocks were unable to follow the ter
rife pace sch by the bond market yester-
day and the fact of rather indifferen.
| buying in the share list induced traders
for the short account to exert consider
| able pressure against prices In the after
noon. The great strength and activity
OF bonds disclosed unmistakable pur.
chases for speculation, and It was alto
gether probable that stocks suffered
from the switching OF interest from
them to funded securities. On the av-
erage. purchases OF bonds. especially
of foreign Government and municipal
issues and corporation offerings OF this
year, have returned much better profits
since August than have stocks. Ru,
the real support of the bond marke.
has been the buying OF shrewd investors
OF large and small means who long ago
read accurately the trend of money
rates and acted accordingly. There were
new additions yesterday to the number
Of reserve banks which have reduced
their rediscount rates and the contrac-
ton of interbank leans within the re-
serve system to s2s.o0o,00o the smallest
total since the early summer shows
clearly that monetary ease throughout
the country is being fastened by the
liquidation of crops
The turnover Of bonds on the New
York Stock Exchange Yesterday, in ex-
cess OF $26,300,000. was the largest of
the year. and Victory 4Ts reached up
to par twice. closing only slightly under
that level. The most pronounced strength
was In foreign issues, notably Kingdom
OF Belgium 7ias and Rio de Janeiro IS.
but the demand at gradually rising
prices for railroad and industrial issues
was persistent throughout the day. The
recent investment return of to ~ per
cent. has been succeeded in many cases
by to 6h per cent, and great many
bonds which lately yielded per cent.
are returning less than per cent. The
| rapidity of the last few days advance,
naturally, cannot be continued In
definitely because, in addition TO the
normal realizing sales which will come
along in due course. the stabilizing In
fuence Of mercantile paper rates is to
be considered. Although those rates
have begun to show signs of easing. the
indications SO far are more sentimental
than of practical Importance. AS a
reflection OF general business conditions
the bond markets action is showing
nothing of a positive order. AS a matter
Of fact, the absorption of many millions
OF dollars in bonds suggests that as
funds are released from old loans on
merchandise and products Of the farms
there is so light demand for them In
| industry that they are flowing into a
market in which they may earn good
rates until business gets better.
A feature of the stock market was
the sharp marking UP of preferred stocks
and of shares Of companies in lines In
which trade was better than 1t was in
many others. Associated Dry Goods
and National Cloak and Suit stocks
could be mentioned In that connection
as well as stocks Of several railroad
equipment companies. A dozen or more
preferred stocks gained 2 to points,
being influenced to degree by the in
vestment impulse which stood behind
bonds. Speculation found little material
with which to work among common
stocks of industrial companies. II was
a question whether or not short selling
was hastened by consideration Of the
| assassination OF the Premier Of Japan,
although the indirect relation of that
deplorable event with the pending dis
armament conference undoubtedly had
refiexes in the financial mind.
A beiated rally occurred in grain fu-
lures prices after the two active options
had reached down to new low points for
the year. At s1.o1 and s1.os a bu.nel
respectively for December and May
wheat. the days Improvement was
slightly moro than cents a bushel
Cotton luctuated feverishly. closing
| slightly lower. The familiar drop ot
German exchange again occurred, a rate