The Washington herald., 1921-07-31
short COVERINGS
MARK DULL TRADE
0NSTOCK MARKET
Bears Not as Confident as
Earlier During
Week.
EXCHANGE FIRMER
Lire Advance Eight Points on
Strong Buying Move
ment.
EXCHANGE FIRMER

NEW YORK. July 3O.-The stock
turned extremely dull dur
ng the last session of the week,
Ne advantage resting with operators
IN the constructive side. While the
|hovement in places was relatively
|nimportant, there were enough in
|tances of the downward trend be-
pg reversed to convey the impress
lon that traders on the short side
kere not as confident as they pre-
Fnded to be on Thursday and Friday
[hen attacks on specialties were
beeting with success. The existence
y a covering movement was noted
Specially in the case of General Elec-
bic, Studebaker. and Steel common-
ka;lroad issues were again in de-
band. special attention being paid
y Northern Pacific. Southern Pa
bfc and Great Northern. The gen.
fal list of industrials showed stead
hess.
Exchange Stronger.
A decidedly better demand for
Bills in the foreign exchange mar
ct was probably the most impor-
|hnt development of the day. Ster-
ing advanced y cent to S3.56 Il.
french checks went to 7.61 \ cents,
Ibmpared with 7.55 at the close yes
'erday. and a steady buying move
kent in Italian lire carried the rate
O points to 4.23. Cotton advanced
3 to 20 points, principally on COW
ling of shorts over the Monday gov
fnment crop report. Wheat re-
cted a full cent early. but recov-
red and advanced y cent. The
karket was narrow.
A deficit in reserves amounting to
3, 100000 is shown by the clear
hg-hOuse statement This results
Pom & decrease Of 1860. 900 in this
em and reflects a reduction of S20,-
DO. 900 in reserve deposits at the
serve bank. Loans meanwhile are
IS by S31 200. 900 and deposits show
shrinkage of S1O.3OO,OOO. Govern
lent deposits are lower by $780,
Money Easier.
Appearance of a IA per cent re-
ewaI rate for call money on the
lew York Stock Exchange and of
81. per cent rate during part of
he day has called attention to un-
istakable signs of easier money.
L.. S., .aN~fA
hermOre. in a 5% per cent rate for
me money, in an active and rising
Dnd market. and in a tendency to
deem outstanding securities before
e date Of maturity. The reserve
tnk statements meanwhile show in
leasing reserves, and cables from
broad tell of easier money in the
reign centers.
On a number of precious occasions
lis year money rates have softened
nd hopes of cheap money have
sen, only to be dashed after a
REF peliod. Now. however, there
Re reasons for believing that cir
amstances are considerably altered.
revious castings have been explain
BILE on the basis OF incidents OF
transient character. such as the
funding of a series of Treasury
rtificates. Subsequent Tightening
the market indicated that the
bins arising from contraction OF
tedit by member banks were being
ken in paying of debts at the Fed
EaI Reserve Bank. These debts act
as huge absorbers. AS member
links came into fresh funds they
iilized these. not by placing them
At at time or call. but reducing
heir borrowings at the reserve
bnk. As long as these debts re-
aimed heavy. the money market
build not be expected to act in what
light be regarded as the normal
shion.
Banks Out of Debt.
IL would appear now. however
lat a point has been reached al
hich many of the big member
links are pretty well out of debt
hat this is likely to be the case
ay be seen from the fact thai
e total Of bills discounted for mem
PRS by the New York bank has
hrunk from S9O4. 900 900 to 1885,
10000 since December 30 last year
bid meanwhile continues to poul
to New York in extraordinary
mounts. and the demands for cred
for business purposes. as a re-
bit of depression and the lower
rice level comparatively small. The
suit is that a condition is reached
which idle funds are looking
,r employment.
1t is characteristic of the present
riod that the better supply oi
tnds now available Is being en-
Dyed in a distinctively constructive
amer. Buying of bonds has been
markably good, as may be seen
bth from the number of issues
ktive and the magnitude of the
Lins recorded. Quite evidently con-
fence is still lacking with regard
the outlook for Industrial profits
ID for the value of common stockI
Eer the next few months. Similarly
hong the common stocks the pref
ence is for railroad issues rather
an industrials. Such a frame OF
nd Is readily understandable, since
is fair to assume that the rails
we seen the worst, while ii is ap-
rent that careful discrimination is
eded in judging individual indus
les and their corresponding securi-
Es The public is prepared, further
ore, for further signs of distress
the case of individual companies
Higher British Rates Likely.
British observers distrust their
IN cheap money. realizing that II
the result of imitation and that
CHER rates are likely, to return
the fall unless the government
sorts to fresh borrowing In our