The New York herald., 1921-01-06
FINANCIAL NEWS
AND COMMENT
Libertys Advance and Foreign
Exchange Soars-Stock
Market Quieter.

Interest in the financial markets CEN
tired yesterday chiefly I'm Liberty bonds
and foreign exchange. Stocks were
auieter than on Tuesday. and there were
numerous evidences OF the return of
business into the hands OF professional
traders. resulting in a decidedly uneven
array OF quotations at the close. There
was. however. no doubt of the power be-
hind the demand for Government war
bonds. whose gains of n quarter to near
ly a full point added to the advances
of preceding sessions of the week, car
ried several OF the Liberty issues to
about points above the lowest prices
recorded In the last fortnight of the old
year. The upturn of Government obli-
cations could be explained on several
grounds. In the first place. investment
yields extending from about 5 to nearly
6I5 per cent. in the various maturities,
excepting the first s1as. has attracted
funds from investors with free cash on
hand at this time. Also. the reports Of
bond dealers indicate a round amount
Of repurchases resultant from sales for
income tax record during the late
months of 1920, and the expectation in
many quarters of easing money condi-
tions has evidently brought into the mar
ket much buying. This last factor. too,
may be credited for the better tone seen
this week in corporation bonds. for 1t is
a financial axiom that when money and
credit cheapens the effect is rise Of
fixed interest bearing securities. Pur-
chases in anticipation of lower money
rates have not yet witnessed the actual
event of a money decline, as the call
rate continued yesterday at per cent,
although the demand was less than the
day before, and time funds were as firm
as ever.
The days sharp upturn of 111a cents
in sterling exchange carried the rate to
the highest point since the second week
Of August Francs gained considerable
ground, which was all the more marked
In contrast with the sagging tendency
In the last days of December. and Hol-
land and Swedish quotations rose with
banking quarters. the covering Of short
contracts supplied much Of the days
business, and this movement was prob
ably furthered by expectation of results
crease credits for the expectation of
goods to the Continent and Far East
ern countries. News about steps to be
taken in this direction is still too vague
British bankers and exporters are look
ing for Government assistance in some
manner. An influence on the exchange
market. whose product should be recog-
ment of gold from India to the United
States, now getting under way. Offer
ings of commercial bills on London were
reported light. and this made more diff
ficult the task of buyers to fill require
ments without bidding rates upward.
In the stock market professional SELL
ing made inroads upon some of the oil.
rail and miscellaneous manufacturing
company shares. But IL spoke well for
the underlying stability OF prices that a
reduction of the Midvale Steel and Ord
nance Company's quarterly dividend had
little effect upon other steel stocks. In
fact, Crucible Steel advanced points.
and other independent issues we're no
more than irregular. What was more
significant, perhaps, than the steadiness
of the steel shares in the face of the
Midvale dividend action was the recep-
ton accorded information in the weekly
survey of the Iron Age, that the coun-
try's pig iron production in December
was 231 300 tons. or per cent. less than
in November, while active furnaces were
81 less at the end than at the beginning
OF December. Copper stocks were
strong, aided by an impression that the
market for the metal was looking UP.
The response to news that the great
Amoskeag mills had reopened on full
time, with other plants getting under
way, was a rise Of about 81 a bale in
cotton future prices. Wheat. however
lost ground. falling from to AZ cents