The New York herald., 1922-03-05
FINANCIAL NEWS
AND COMMENT
Stocks Decline With Continued
Realizing-Foreign Ex-
changes Improve.

Stocks worked lower yesterday under
continued realizing sales. but, as on
4 Friday, more extensive phases of the
reaction were seen in stocks which
\ lately have been bid upward rapidly.
The moro prominent issues in that group
were Baldwin Locomotive, Studebaker
and Gulf States Steel, their declines be-
| ing in excess Of point. The fractional
recessions recorded by most industrial
and railroad issues betokened no new
aspects OF the speculative situation and
the upbidding OF particular shares to
new high points for the year suggested
that pool operations were still much in
! the foreground. Consolidated Gas was
conspicuous example OF issues with
a following, its price going to this
years best level OF above SO.
The foreign exchanges did better
than they did on Friday although a
highly feverish market in sterling in
dicated that spectators had become af-
fected by a lessening of new influences
4 for the rise. Wheat futures were de-
cidedly weak for a time, the May op-
| ton dropping cents bushel under
\ Fridays last price. Their late rally
was of nervous character leaving the
market still weak. Undoubtedly, grain
prices suffered in the closing days of last
week from a natural desire of traders
| to realize some Of the profits accrued
1 in the great advance which has occurred
since the middle OF January. An easy
tone OF cotton, bringing reactions OF
| 10 to 20 points, was In keeping with
the Indifferent and meaningless fuctua-
tons that have taken place In the
last fortnight.
The present stage OF the stock market
| is OF the kind which frequently has
marked periods OF extensive advances
following a depression OF business. A
great deal OF stock went out OF the mar
ket at the low prices OF last summer,
and the spectators and the investors
who bought then have displayed a
marked reluctance to convert their
shares into cash. At the sane time,
market comment shows that the public.
outside OF the far sighted persons who
bought lower down. has not been i'm
PRESSED greatly by fashy operations of
pools among Industrial stocks and has
displayed no willingness to take stocks
or the pools hands. A false theory
has been built on that fact, namely, that
as speculative groups cannot unload they
will have to keep marking prices higher
and higher until the public does come
in. That is the sort of reasoning which
has blasted many hopes. A pool is not
much better protected against q swing
of sentiment to the bear side than is the
average trader, because artificial support
to prices. even though backed by large
resources, meIts away quickly when al
tered speculative conditions arouse heavy
sales OF stock for the short account.
The weekly New York Clearing House
bank statement showed the third deficit
OF reserves since January /, that item
amounting to s12,ooo,ooo. Prior to the
! establishment Of the reserve system such
a display would have aroused thoughts
OF probable higher money rates in the
week TO come. But the banks now can
expand their reserves at any time
through rediscounts OF their paper or
Government bond holdings and the
deficit apparently meant little more than
that member banks In the last two or
three days have paid off loans extern
sively at the reserve institution. Their
reserve credits at the bank declined
nearly S55.000,000. An increase OF
\ $13.s00.0o0 in loans reported in the
\ statement OF actual condition on Friday
acted to expand demand deposits $9.-
Il 000 n00