The New York herald., 1921-05-20
FINANCIAL NEWS
AND COMMENT
Stock Market Quiet-Reserve
SYSTEMS Reserve Ratio Up
Nearly l Per Cent.

The stock market practically marked
time yesterday waiting for further
news OF events in Europe and the bond
market was more or less affected by
the same situation. AS the output OF
new security issues has been slowed
down by the inminence OF a large
French Government loan, it may be
said that. at the moment, the entangie-
ment over Poland's activities In Upper
Silesia Is the factor OF greatest cur
rent significance In tho financial mar
kets. Foreign exchanges continued to
show confidence In the days transac-
tions that England and France would
come to an agreement In their treat
ment OF the German-Polish dispute, and
for that reason followers OF the stock
market were less concerned about Euro
pean politics as an influence OF con-
tinued force than by the effect 1t might
have on sentiment In the next few
days. Consequently. although buying
tn be no great selling pressure except
that engineered by the professional
trading element Several Industrial
issues declined a point. one or two
We're driven down 2 to s points by bear
raids. but near the close OF business a
fairly broad rally left quotations above
their lowest levels.
The weekly Reserve Bank statements
certainly contained no information dis
turbing as to tho general movement Of
reserve banks was advanced close to q
full per cent. or from 56.9 per cent. to
56.S per cent, the Improvement being
brought about through q gain Of $13,-
$780, 900 in reserves. a fall of S1S.S00. 900
in deposits and a decline Of moro than
s37.0oo.000 in circulating reserve notes
The strengthening OF position by the
New York Reserve Bank was striking.
its ratio of cash to note and deposit ris-
ing from 53.S per cent. TO 81 per cent
Ratios as high as those reported yester-
day for the system and its New York
member had not been recorded since the
summer of 1918. The feature OF the
statements was the marked fall of bor-
rowings. those Of the entire system based
on Government war obligations receding
s142,sO0 900. while the total of all bills
on hand on May Is was s1S7. 1000 less
than 1t was In the preceding week. a re-
markable change which reflected Govern
uent liquidation Of Treasury certificates
and the liquidation of commercial loans
The fact that call money seems to hang
moro persistently at the per cent. level
in New York than known conditions of
business warrant Is explained in part
evidently by the urgency with which
member banks are paying off their obli-
cations to reserve institutions. This is
tending TO take deposits away from New
York at time when the needs entaiied
in large volume OF new financing are
bearing down on the call loan market
Sterling exchange sold at 4.o0ss until
q late reaction left It at 4. The French
rate evidently was buoyed up by plans
for the French loan. as the movement
was strongly upward. its net gain being
II points and It's final quotation S.77la.
Marks, on the other hand. eased off
under heavy offerings which was at
t-fbuted to transfers Of funds from Ber-
lin in connection with the pending rep
arations payment. It will be interesting
to see whether the next statement by the
Reichsbanls, shows the effect Of the rep
arations through an expansion of circu-
lation. Tho banks OF England and France
reported yesterday slzablc reductions OF
their circulating notes.