The New York herald., 1922-12-02
FINANCIAL NEWS
AND COMMENT
Strength Of Pre-Holiday Stock
Markets Shows No Sign y
of Abatement.

The strength displayed In the stock
market before the Thanksgiving recess
was in evidence again yesterday and
all through the session the trend OF the
general list was toward higher levels.
At the same time. there was little TO
indicate whether the demand for stocks
came from short sellers who are taking
back the stock they had sold during the
decline, or from a source decidedly more
substantial.
IT cannot be denied that there is to be
seen in the market In the last few days
buying OF a better character than at
probably any time since the break got
under way more than a month ago.
Nevertheless. there Is plenty of buying
power which is being withheld in the
absence of better proof that the re-
adjustment Of the overbought condition
of the market has been completed
1t is not at all surprising that the
bullish utterances from such sources as
the Federal Reserve Board. the various
banking Institutions, &c. are not more
clearly reflected In the stock market.
These reviews and interviews continue
to poi; out the expansion which is
going on in business and industry and to
predict an even greater prosperity In
months 10 come. But no one who has
carefully studied the situation has had
any doubt on this point. The Improve
ment was there for all to see and the
suggestion of continued bettermeut was
not difficult to discern.
The stock market advanced for
months because of this outlook, but 1t
did not break because of any great
change in that rc spect. Once In while
the stock market gets so Tar ahead OF
actual developments that a readjust-
ment becomes necessary. and this Is
what happened In Wall Street In the
last few weeks When the readJust-
ment Is completed there is no reason to
believe that the main upward swing will
not be resumed with all It's original
force.
A sharp advance in the outstanding
circulation of the Federal Reserve sys-
tenn was revealed in the weekly report
made public yesterday afternoon. This
is no more than normal development
at this time of the year. however with
merchants the nation over making prep
arations for the big seasonal expansion
in trade which will grow Increasingly
greater from now until Christmas.
Then, too. every national holiday wilt
nesses a more or less widespread ten
dency to spend money. and no doubt
some of the $30.0o0.000 increase In
Federal Reserve note circulation can be
attributed to the Thanksgiving period.
The same increase was noted after
Memorial Day and again after the
Fourth of July.
More than s35.ooO.0oo was added to
the Federal Reserve Systems total OF
rediscounts, very large part of which
was represented by the increase in loans
on commercial obligations. Member
banks reserve accounts. on the other
hand. declined more than $4,000. 900.
the larger credits established through
rediscounts apparently being withdrawn
and put into immediate use. The New
York Bank, however. reported a very
sharp contraction OF borrowings. with
discounts secured by Government obli-
cations down about $4,000, 900, and all
others but $2.0o0.0o0 higher. Member
banks reserve deposits In New York
dropped more than $4,000. 900. but the
note circulation expanded approximately
S14, ,00o.0 900.
Foreign exchanges did better. French
francs getting above the seven cent level
again. Cotton moved within narrow
limits and grain prices advanced some
what above Wednesdays prices. The
exception In the latter market was oats
which receded fractionally In reflection
OF the tremendous crop reported from
Canada. Call money was In less supply
than earlier in the week and advanced
in the late trading from s to 5k per
cent.