New-York tribune., 1921-06-22
Market Slump
iillally Ended
On Buying Aid
Demand From Shorts and
Outside Support Starts
Rally When Pessimisrn
Had Reached Maximum

On the embers of six weeks de-
cline in security prices recovery of
market values was constructed yester-
day. The turn came when pessimism
had reached summit, and when
masses of spectators were genuinely
frightened.
After Mondays smash prices reached
level which traders of initiative re-
garded as attractive, and whether as
shorts covering their commitments and
converting paper profits into hard
cash, or as bargain hunters, or as
| financial leaders seeking to give sup
port, buyers nevertheless seized the
initiative. And for the first time in
many days the market had what had
been conspicuously lacking
power.
! Though there were many advances
in excess of two points of railroad
and industrial stocks, the average
gains were insufficient wholly to offset
the sharp losses of the previous day
AS soon as the course of fluctuations
changed, those observers whose senti-
ment is based on the evidence of the
ticker tape became visibly more cheer
full, and forthwith mental speculation
began as to whether the turning point
in the market had come. Those
brokers who months ago sought dog
matically to assert that the bottom had
cd 4l.L
present markets have not one, but
many turning points, and that one
days fluctuations are insufficient data
on which to base conclusions as to
major swings. The slamming tactics
of professional spectators during the
break were such as to indicate that
the decling market had within itself
| the germs of q recovery.
The selling had not abated when the
market opened yesterday. Steel COM
mon slumped to a new low record since
1915 before the upward surge began.
After half an hour Of rising quota
tions there was another reaction, and
the sustained rally came during the
second hour. Toward the close some
prices receded from the high quota
tions for the day.
The upward rebound in the stock
market was reflected in recoveries in
the commodity markets. The maxi
mum gains in the Cotton Exchange
were not held, but final quotations
were from 20 to 23 points higher.
Wheat quotations at the close revealed
gains of from 3 to cents.
Not in news but in internal develop
ments did the recovery originate. The
upward movement in stocks was facili
tated, however, by the lowest call
money renewal rate since October 27.
l9l9. The rate was 5 per cent for the
first time since, the Federal Reserve
system substituted the policy of rails
ing discount rates to check credit ex-
pansion for mere warnings. The re-
ductlon in the call money rate came,
it is interesting to observe, after the
| Federal Reserve Bank of New York
had twice reduced discount rates after
series of advances had accomplished
their purpose. There is, of course. no
direct relation between the discount
rate and the charge for speculative
credit, yet both measure the funda-
mental easement
In the international money market
the downward reaction in sterling and
the continental exchanges persisted.
Sterling cables were Ia cents lower
for the day. Although the United
States authorities have indicated op-
position to the payment of reparations
solely in dollars because of the effect
on the exchange market, there has
thus far been no announcement of a
change in technique. The market is
still nervous because of the effect of
German operations and the expectation
| of future transfers.