The New York herald., 1921-11-03
FINANCIAL NEWS
AND COMMENT
RediscOunt Rate Cut Impor-
tant Move to Aid Business
Stocks Move Aimlessly.

The reduction OF redlscount rates by
eight Reserve banks yesterday carried
the cost of borrowing In New York and
ential rate on loans secured by Liberty
bonds during the war financing period
and in six other cities a half of one
per cent AS a measure OF credit
easement and OF the purpose OF
Reserve officials TO aid business the
reductions were OF much Importance.
AS loans vested in merchandise COM
mitments have been liauidated with
fair rapidty during all Of this au-
tumn, there should be soon some re-
Election of the u and per cent. redis-
counts in the mercantile bill markets.
Commercial paper thus far has c!ung
closely to range of 5ia to per cent
for open market discounts.
The fail of Reserve Bank rates did
not come altogether as a surprise as the
trend of weekly condition statements
by many of the banks and Of the system
as a whole for several weeks limited a
reduction. 1t Is expected that the state
ment to be issued tomorrow will show
another new high point for the ratio Of
cash to deposit and note Liabilities In
the consolidated record, and last week
the ratio of 7O.S per cent. was the high
est since October 90. 1917. The bond
market in the last fortnight has re-
Elected a widespread appreciation of
the trend of money and credit costs,
made all the more obvious by yester-
days reductions.
While bonds continued very active and
strong in yesterdays transactions.
stocks drifted rather aimlessly. The
fact that pressure from realizing and
short sales had much to do with shaping
prices was seen in the decline Of sew
eral oil shares despite news that Penn
sylvania crude petroleum had been ad-
vanced again. the price increase this
time being double the increases on the
four other occasions of advances in the
last month. Steel stocks also softened.
being influenced possibly by reports of a
moderate slackening of buying of steel
products in recent days. The steel mar
ket Is still to be read in the light OF
news applying to the various depart
ments separately. Wire and other light
products are in good demand. warrant
ing talk Of new price upturns. but
plates, bars and other heavy material
continue dull The Iron Age reports that
steel production continues at more than
40 per cent of the country's capacity.
which, taken with the fact that facili-
ties during the war were increased
largely, indicates that great deal Of
steel Is being made. But profits are de-
termined largely by overhead costs and
reports of manufacturing companies for
the third quarter of this year indicate
that costs are high. The Midvale Steel
and Ordnance Company reported yester-
day a deficit. which. while slightly less
than that Of the second quarter of 1921,
was nevertheless substantial.
The strongest spots In the stock list
contained issues classed as specialties.
namely. Corn Products. Peoples Gas.
General Electric and United Fruit.
Sharp advances disclosed a scarcity of
offerings, a situation which has been
noticeable among many inactive shares
of Investment standing or speculative
possibilities during the last six weeks.
Railroad stocks were more conspicuous
becausa of their dulness than for any
other reason.
Wheat prices broke down TO a new
low level, the December option getting
within a fraction of dollar busheL
the lowest quotation since the carly sum-
mer of 1916. A late rally carried the
options back to about where they closed
on Tuesday. Cotton scored a rapid re-
covery after an initial reaction.