The New York herald., 1922-10-23
FINANCIAL NEWS
AND COMMENT
Bond Liquidation Supplies Part
of Needs of Expanding Trade
and Industry.
HEAVY SALES LAST WEEK
Irregularity of Stock Move
ments Marks Trading by
Professionals.
IEAYY SALES LAST WEEK

out OF the maze OF developments OF
the last week in the financial world one
thing stands out more clearly than at
any other time in the last month. That
is that business and industry have
progressed TO the point where the sur
plus funds available for them are no
longer sufficient TO meet their needs,
and IL has been found necessary to pro-
vide the deficit. This has been done so
far and. naturally. too, through the
sale of securities into which had drifted
the big excess OF money that could find
no other means Of investment during the
last year.
For three or four weeks It has been
increasingly evident that the bond mar
ket would be called upon to furnish the
difference between the available funds
and the minimum industrial require
ments. During that period and longer
institutions, corporations and in some
cases wealthy individuals have been
liquidating some Of their vast bond hold
ings in order to be in a position to meet
the call which was surely in prospect.
That it is at hand Is evidenced not only
by the lower levels prevailing In the
bond market, but by the hardening ten
dency of money rates and other equally
significant factors, such as increased
car loadings, bigger bank clearings,
higher rates of operation in leading in
dustres. less unemployment &C., all of
which point in the one direction-bigger
business.
Trade Best Since 1920.
The weekly trade reviews at this time
are more encouraging that at any other
time this year. At the end Of the week
one Of the leading agencies went so far
as to characterize the position of trade
and industry as the best since the spring
of 1920. Another review at the same
time asserted that the current business
expansion. while due in part to seasonal
conditions is largely the result Of some
thing more important than weather In
nuences. The revival OF basic indus
tries. it points out, is especially signifi-
cant because Of its bearing on the gen.
eral situation.
one point which the last week has
definitely developed and which must be
regarded as exceedingly desirable at this
time is the high levels to which the
prices of cotton and grain have climbed.
Whatever the merits or demerits OF the
new tariff. these advances in the prices
of agricultural products give complete
assurance of the state of the buying
power in the farm districts Of the nation.
The tremendous increase in the return
which the farmer will receive for his
labor this year will be an unusually
valuable asset and will Offset to some
extent the trade losses which the coun-
try's new foreign trade policy may be
expected to cause Europe as buyer
cannot be depended upon this year, nor
for some years to come. to play very
large part in keeping American factories
going ahead, and the high tariff now in
effect cannot be expected to influence
American export trade favoratly.
Francs and Marks Fall.
About the only effect in the financial
markets last week of new political de-
velopments abroad. such as the resigna-
ton of Lloyd George and his Cabinet
and the firmness of French demands fo'
a rigid supervision of German fiscal
affairs. was a sharp break in francs and
marks. both of which made new lows
and a temporary interruption of the up
ward swing of sterling exchange. Ger
man marks got as low as 2h hundredths
cf a cent - about 1000 marks to the
dollar.
While there was a disposition to crcdi
this break to the overthrow OF tht
coalition Government in Britain. II !:
more likely that that development onl,
served to quicken a movement whicf
was Inevitable. The decline In French
francs Is another matter and might b'
attributed in part at least to Lloyc
| George utItdls Ht ''S'a
tangled European politics at this tim,
of the chief figure which has stood lie
tween Germany and France in theii
ouarrels over reparations payments NAL
foreshadow very rough going In futur'
conferences to decide what should b.
done for the best interests OF all nations
Money and stock Markets.
Tremendous operations in the none,
market last week conducted will
scarcely a ripple on the surface. wer'
a remarkable tribute to the efficiency o
the Federal Reserve system. On th'
same day that Great Britain paid to tn'
United States Government s5o.000,0ot
interest on her war debt here. the lat
ter disbursed s137.Oo0.O00 on her owr
war obligations. The only evidence Of
this big shifting of funds was the slIgh
furry in call money rates on the Stool
( Exchange consequent to the calling o
loans in preparation for the Govern
ment's Withdrawals IL is hard to con
ceivc such an operation being carried or