The Washington herald., 1921-08-02

ttousi pfool tntt tnerWeekly GEAR
ing house bank statements have
lost their Importance as a stock
market factor The facti that q
surplus reserve Of about ts,ooo.o
wac turned into a deficit Of more
than s1s.eoo.oeo at the END OF last
week was entirely ignored by
traders and market observers did
not include Il In their calculations
az all. In June. is1s.- the clearing
house banks reported the FIRST de-
nctt since the Inauguration of the
FEDERAL reserve system. and the oc-
currence created no little disturb
ance. At that time stocks wei
booming along and bank loans and
deposits were Increasing rapidly.
Things have changed since then.
In the hrst place the demand for
money 10 waning and bank deficits.
when they are brought about
through too great eagerness on the
part Of the banks TO retire their
debt with the Federal resrve bank,
are not considered worth while
worrying about. II the precedent
established and carried out Oh sim
iiar occasions during the past year
Is followed this time. the reserve
dehctt should be made up before
the end of this week, probably al
the expense Of q slight increase
In rediscounts at the central bank.
However. IL Ia possible that the sec
ond part Of this program may not
follow precedent for the tendency
OF late has been TO reduce bor-
rowings at the reserve bank and
u may be possible to make up the
ls.0oo.ooo dencit from the proceeds
Of retired loans
interests which are usually well
informed on Developments in the
sugar industry have been receiving
reports TO the effect that the de-
rnand at the new s-cent level \,
better than 1t was before recent
price advance. This waS one an
the motivating factors in the buy
ing OF the sugar stocks in today's
market II was not clear whether
the higher price produced the
greater demand or whether the con.
viction that the demand-for the
usual fall csnning-was about 70
increase prompted the refners in
raising their price. AnOther bit of
news which gave the sugar situa.
ton brighter hue was the dis
patch from Havana stating that n
German consortium had made an
inquiry into the price Of 1000 900
tons OF sugar. This is believed 20
be the amount OF surplus supplies
which the Cuban authorities plan
to withhold from re market as a
means of preventing further de-
morslizations.
Many trading sessions have
passed since the last time Steel
common held its old time price az
leader Of the Industrial depart
ment- IL assumed that role today,
many observers protesting the be-
lief that its strength from the very
beginning Of trading was primarily
instrumental in giving the whole
market its appearance OF strength
This movement in Steel common
really began in the last ten minutes
OF Saturdays session and was gen.
orally ascribed 20 short covering.
II Is not often that one hears of
shortage in the floating supply
OF Steel common. more than 5.O0O.-
400 shares OF which are outstand-
ing. Rut there are reports. and
from houses which are not usually
given to idle talk. of shorts en-
countering difficulty in borrowing
the stock. AS far as outside infiu-
ences are concerned. there yas
nothing in the news to account for
the strength OF Steel common.
Bethlehem Steel b. CrucIble and
the minor issues were quick to
profit by the buying OF Steel COM
mon. The better demand for rail-
roal equipment stocks was not sur
prising in view Of the prevalence
of short covering in the general
list.