The New York herald., 1922-01-12
FINANCIAL NEWS
AND COMMENT
United States War Bonds Go to
New Highs-Stocks Rally
i'm Small Trading.

The cumulative effect Of easing money
rates and an excessive supply was seen
yesterday in rise of U. S. Government
war bonds TO new high levels for the
movement, the advance being retarded
in no way by poor telegraphic communi-
cation with several outside cities Stocks
also recovered. but in this market II was
thought that the slackening or selling
orders because of damaged wires lead
ing to the middle West had nearly as
much to do with the price trend as did
purchases Of local origin. The stock
market turnover was small and the
shares which made the best display Of
strength were ones with reputed large
short interest. Call money was quoted
at az per cent. for all borrowing, and
there was plenty of time funds to be
lent on mixed collateral at AZ per cent.
The Street was disappointed in It's ex-
pectation in regard to the Reserve
Banks rediscount rate. as Wednesday
was the customary day for reduction
to be announced and no action on II was
taken. In view of the light demand ac-
commodation In most lines the financial
community has the opinion that a reduc-
ton will occur soon. But the subject Is
worth reference whether or not the
Reserve Bank officials would prefer for
a time to see the rediscount rate stand
higher than the open market bill rate
as is the practice followed by several Of
the central banks Of Europe. The redis-
count rate is now y to q of per cent.
more than the outside discount rate for
acceptances and the latter has tended
this week to work lower from Monday
mornings quotation.
The interest in Liberty bonds and
Victory notes was so broad as to sug-
gest that the Government was an ex-
tensive buyer and the upward trend Of
that group carried foreign issues and do
mestic corporations forward. The Lib
erty AZ per cents. all sold at SO or
better and only one failed to top De-
cember's best quotation. Probably. the
days business. as did Tuesdays trans.
actions, contained considerable buying
in anticipation of marking down OF
the Reserve Banks rate to 4 per cent,
which raises the question Of possible re-
sales II the rate be not lowered soon,
but in its broader aspects the money
position indicates a gradual decline OF
investment return on first grade securi-
ties. brought about by rising prices.
Many stocks advanced from point to
3 points, chiefly in the industrial de-
partmcnt. OIL stocks rallied brisisly.
paying no attention to cut OF cent
a gallon In the Standard OIL Company
Of New Jerseys prices for gasoline
throughout a wide territory. The steel
shares found nothing depressing in the
weekly surveys of trade conditions al
though they recorded a smaller mill
capacity in operation than they did in
the closing days of December. The
Iron Age noted that, with the recent
Pennsylvania Railroad order for 10000
tons. most large contracts had been
placed for 1922, but there are substantial
car orders in the offing and the reduced
consumption of steel throughout the
world in 1921 forecasts gradual growth
of export buying this year.
The foreign exchanges reacted In the
morning but came back close to their
starting points In later dealings. The
market evidently was waiting for fur.
thcr developments TO come from plans
for the international conference In
Genoh and dealings were on a small
scale.