The New York herald., 1922-01-10
FINANCIAL NEWS
AND COMMENT
Cali Money Falls to 3 P. c.,
but Stocks Gradually Re-
act Through Session.

The feature of yesterdays stock
market was the obvious lack Of relation
ship between the trend of money rates
and the course of share quotations
When call money dipped down to per
cent. the lowest rate on the New York
Stock Exchange since November 3. 1919.
stocks were in process OF a gradual re-
action. which continued until the close
Of business. Supplies Of time funds at
Az per cent were far In excess of the
demand for them. and while Liberty
bonds and numerous corporation funded
issues were bid upward fractional dis
tances none of the markets was more
impressed by money tendencies than Il
was last week. The bond market so far
this month has clearly been affected
both by the great advance Of November
and December, which promoted realizing
sales at the time when the January in
vestment demand was expected to be
active and by the extraordinarily large
output Of new securities in the last two
months Of 1921. Although the position
of money and credit favors large alb
sorption Of bonds it is possible that the
present supply Is great enough to slow
down new business for time.
The stock market was listless, but.
nevertheless, it contained several inter-
esting developments. The fall of more
than points each of Erie Railroad
shares. common and preferred, was suf-
fciently sudden and extensive for low
priced issues to provide a real sensa-
tion The prices were the lowest of
many years. the common stock at be-
Ing the minimum since the company car
ried it's present name. The Street was
puzzled by the movement, as the Erie
met its January 1 necessities with a
moderate balance over and has no
pressing obligations as far as known
the first sizeable maturity being $751;
900, 900 in notes on April 1. AS most OF
that issue is held by the War Finance
Corporation, which has the power to
make renewals il it so elects, the road
has considerable time to make arrange
ments for that maturity. Chicago and
Northwestern also was pressed down
points from its highest quotation IF the
day but recovered most of that distance
Another cut In the price OF Pennsyl-
vania crude petroleum. amounting to
25 cents a barrel, was unsettling to the
oil share group. The highly volatile
quality Of oil quotations in the last four
months has shown, at the least. that this
commodity is unusually sensitive to the
laws of supply and demand in a period
when the market outlook is clouded by
uncertainty as to foreign consumption
Of this year. The large flush production
of the new Mexia field and the haste OF
Mexican producers to get petroleum out
OF the ground have introduced factors
into the oil situation which were not
expected when prices began to rise last
summer. Oil shares were the center of
bearish selling and helped to disturb the
industrial list. Most of the reactions
were fractional. but declines Of point
occurred among railroad equipment and
sugar issues and/various specialties.
The over Sunday response to news
about the pending financial conference
abroad was sharp rise Of the leading
exchanges. sterling at the start being
2 cents more than Saturdays last quo
tation. The final price Of 1.22h was
2% cents higher. and persistent strength
marked Belgian and French francs.
while marks moved from 0.54A to o.6O
cent. leaving Off near the top.