The New York herald., 1921-12-16
FINANCIAL NEWS
AND COMMENT
Bonds Firm-Victorys Touch
New Highs-Stock Trading
Heavy-Exchanges Off.

The stimulus TO speculation which
carried many classes of stocks upward
with force yesterday evidently was de-
rived in part from a striking bit of
evidence of the easing trend OF credit
costs and the abundance of funds avail
able for investment in securities. This
was contained in the applca ations for
S55, 100000 OF city of New York bonds,
the successful bid being at a price which
practically established new high record
this year for long term municipal bonds.
The applications were sufficient to alb
sorb an issue four times the size of the
actual offerings, and although the pur-
chase price of 103.407 was higher than
many bond men had anticipated sales
were made in the Curb market on a
when issued basis at los. Bonds as a
whole were firm. and again the Victory
issues attained new high levels on the
current movement. Against the back
ground of indications that investment
money was plentiful. the markets paid
no attention at all to a rise of the call
loan rate from Az per cent. to per
cent The upturn was plainly connected
with the days large Government trans
actions. and for that reason was ex-
pected to be temporary.
What had become almost a customary
method of bidding up special industrial
stocks for the sake of easy profits was
destroyed by a. broad buying movement
among the petroleum and steel shares.
That sudden expansion of speculation
reached out into Standard Oil shares in
the curb, and at the close many stocks
were l point to 6 points higher than on
Wednesday. The aggregate of transac-
tions was swelled rapidly in the last two
hours Of business and the turnover in
excess of 100000 shares was the
largest since the third week of June.
There were no points of weakness, al
though the rails were still inclined to
drag. The market presumably has been
held in check by expectation of smaller
earnings in November reports, soon to
be issued, compared with railroad re-
suits in October. But this is only one
of several matters promoting uncer-
tainty over the rail outlook, as the
larger aspects Of freight rate and wage
changes are yet to be examined in the
light of actual DEVELOPMENTS.
The cabled news that Germany had
notified the Preparations Commission
that the 500,00O.O00 mark instalment
81.
evidently cast a wet blanket on the
foreign exchanges, although such a de-
velopment had been expected. Sterling,
at its closing quotation of All II, was
7s cents lower than it was on Wednes-
day, and other European quotations
were reactionary after fairly firm starts
Germany's position had been pretty well
forecast by the recent conferences in
London. 1t seems that not much more
time can elapse before some rearrange-
ments of the reparations plans will be
made public.
No surprise was contained in a slight
decline of the Reserve systems ratio
of cash to deposit and note liabilities,
because the season when the demand
for currency expands is here. and, be-
sides, the December Is payments of
income and excess profits taxes, with
other Government transactions, were re-
fiected in the weekly statement. The
outstanding Reserve notes increased
s23,400.000. deposits increased $24,50o,-
900 and total reserve was enlarged
about S10,O00.000 compared with those
ing week last year Reserve notes in
creased s32.500,00O and the reserve ratio
then was 45.6 per cent, compared with
1876 per cent this week.