The New York herald., 1921-04-06
FINANCIAL NEWS
AND COMMENT
Stocks Recoyer-Call Money
RenewS at 6 and Later
Drops to 5 1-2.

The recovery which stocks experienced
yesterday was less the result OF easier
money than complimentary to the move
ment OF the call and time loan rates :
but the action of money was the most
interesting development OF the Wall
Street business session. For the first
time since the abortive easement oc-
CURED in January call loan renewals on
the Stock Exchange were made at per
cent. Thereafter the rate declined TO
several millions went begging outside at
figures as low as and Al per cent.
The movement on the exchange was
perhaps more significant than that in
the open market for the reason that no
rate so low had been recorded there
since November % last year.
The obvious inference to be drawn
from the recession of loan charges
time funds up TO ninety days could be
had generally at per cent, with loans
Of longer maturities at the same figure
for considerable borrowing-was that
the product of last weeks Reserve Bank
statement was felt yesterday instead OF
on Monday. Unquestionably, the great
growth of gold reserve, the liquidation
of loans at the Reserve Bank and the
general Improvement of member bank
loan accounts i'm the last month justi-
fies a breaking away from the long
established range Of local money rates.
This Is, of course. considering the New
York situation by itself, and the ques-
ton is being discussed whether or not
a decline Of the rediscount rate may he
looked for soon. At the same time it
seems probable that the Federal Reserve
officials will contemplate the situation
OF the Reserve system as a whole rather
than any one district. In that ccnnec-
New York while other districts are still
struggling with problems of slow defla-
tion of merchandise loans is likely 70
cause the authorities to move slowly in
making any change.
Bankers were inclined to believe that
the present recession Of rates would have
more permanency than did the reactions
Of January and December. The ratio
OF cash to deposit and note liabilities OF
the Reserve Bank Is now about Sia per
cent. higher than it was in the third
week of January the aggregate reserve
has increased s2s7, 100000, or more than
10 per cent, in the interval. and member
bank loans to customers have been re-
duced more than s250,o00.000. Unless
the outward flow of funds to the farming
territory gains such impetus in the next
month as to offset the effect Of old loan
liquidation 1t is difficult to see how a
really tight money market can develop
for considerable time.
Industrial stocks were advanced on ex-
tensive short covering in few issues
and by moderate buying of others Net
gains or point to more than two points
were scored by American Sugar. Amer-
can Woolen, International Paper Stude
baker, United States Rubber, steel COM
mon and numerous other shares Rail-
way issues were strong in some cases.
but on the whole dulness and slight
price changes marked that group which
was not surprising In view OF the position
OF the railroad wage and rate situation.
Easy money had favorable influence
on bonds and the foreign exchanges.
There was heavy trading in Government
issues. especially in Victory notes, and
corporation funded securities had firm
tone and were more active than on the
preceding day. Sterling was so far sup
ported by speculative buying orders that
it recovered tile loss OF Monday; the
money situation seemed to be a more
potent influence on the market than the
British strike outlook. Continental rates
were generally firm with sterling.
Wheat lost ground, July falling cents
to Sill a bushel Cotton was irregular.
with a firm tone predominating.