The Washington herald., 1922-01-16
EXCESSIVE SUPPLY
OF MONEY RULING
MARKET FACTOR
Large Institutions Are
Heavy Buyers of
War Notes.

NEW YORK, Jan. 10 = lnterna-
tionai developments were incen-
tives during the week for trad
Ing IN various Russian issues on an
extremely large scale. Russian
rubie notes which sold in December
as low as .o5K of a cent to the
@ruble. or Is roubles for cent.
were traded in In large blocks in
the past few days as high as .141a
of a cent to the ruble or rubles
to the cent. International 81 per
cent bonds which early in Decem-
Der sold at tx advanced yesterday
to 5. These bonds are traded in
on the basis of IS to a I.ooo-ruble
bond.
Plentiful Money supply.
II was q matter of general un-
derstanding that the most import
ant market factor now entering
into the situation is the excessive
supply of money. Some of these
who look on money as the DOM
mating influence in the market as
before the situation Is one In
which money Is more plentiful
than stocks. At the present time.
however. those in control of ac-
cumulative funds are devoting their
efforts practically wholly to in
vestments in the desirable classes
of bonds an dnotes. 1t is current
gossip that banks and large insti-
tutions all through the week were
buyers of Liverty bonds and Victory
notes on an enormous scale, and
some of those making a speciality
of investment business stated that
much of the investment buying is
now being diverted to State and
municipal issues. So far there has
been little disposition to accumu-
late speculative stocks although at
intervals during the week dividend
paying railroads and high class
industrials reflected absorption for
investment account.
Dull Eject Lingers.
with industry and trade still
feeling the effects of midwinter
dullness, the features of the past
week have been a sharp recurrence
or monetary ease after the meet
ing of year-end needs. a strong re-
vival in the demand for investment
securities and unusually striking
developments in the foreign siua-
tion. That money should become
plentiful spon after the turn OF the
year Is quite In accordance with
expectations Last autumn's per-
sistent gain in reserve ratios, de-
spite the added burdens of fall
business and the crop movement,
showed plainly the nature of the
general tendency. The Interrupt
tion to this trend during the last
weeks of December manifestly was
due to holiday trade and annual
settlements. It was apparent that
no change in the fundamental Sit
uation had occurred. Now with un-
usual demands past, the monetary
position turns out to be just about
what might have been expected IL
there had been no interruption.
Investment Securities.
Strength in investment securities
Is Of course the natural corrolary
of the greater ease In money.
With call and time money falling
to new lows II Is not surprising
to md gilt-edged bonds climbing
to new highs. In addition to the
cheaper money IL appears that the
investment market has succeeded
in assimilating the numerous new
issues It is interesting to see,
condition naturally has helped the
position of the older outstanding
issues. 1t is interesting to see,
furthermore, that the present revi-
val of investment buying is be-
ginning to repeat a feature Of last
falls movement, namely, the over
flowing of this demand into the
market for the better type of divi-
dend paying stocks. An example is
the noticeable strength in the high
priced railroad stocks.
Just how long this condition is
likely to continue Is difficult to
say. Short of spring. no revival in
trade is in sight which will inter-
fere with the easing of the money
position. This circumstance argues
rather strongly for continued and
perhaps increasing ease. On the
other hand fresh foods of new
capital issues or a considerable re-
vival of speculative activity might
bring a halt to the movement For
the next several weeks, however, 1t
seems probable that the factors
making for greater ease are likely
to remain in the ascendancy.