The New York herald., 1922-10-28
FINANCIAL NEWS
AND COMMENT
Stocks Resist Price Decline for
First Time in Several Days !.
Shorts Cover.

For the nrst time in several days
stocks displayed yesterday resistance to
the relentless pressure which has been
directed against them. Bonds. too. did
better, with the exception OF the Govern
ment issues.
Liberty bonds as we'll as the new
Treasury AIS were sold all through the
session. and the latter made a new low
under 80, representing a discount OF
more than l per cent. This selling
profess to know not where It comes from
and say they can see no reason for II.
The one theory advanced which Is In
any way plausible is that allotments In
excess of expectations gave many SUBJ
scribers more bonds than they really
wanted. although even this theory does
not stand up very well when COM
parison is made OF the subscriptions and
the allotments.
Buying in the stock market was not
particularly impressive (: its greatest sig
nificance lay In the fact that It was
sufficiently great before the close OF the
day to put the general list OF stocks
above their low points. Most OF IL
appeared 10 represent the taking back
of stock to cover short contracts. How
ever the elimination OF virtually every
decline and the beginning OF the upward
reaction Is largely short covering. so II
can be regarded at least for the present
as constructive.
Evidence that there had been pool
accumulation at the lower prices which
Aax~ H. o..
furnished by the action yesterday of a
number of favorite pool stocks. Issues
like Studebaker. Baldwin Corn Products.
Houston OIL American Locomotive. &c.
advanced with considerable vigor once
the buying movement got well under
way. The Improvement in the credit
situation as revealed In the Federal Re-
serve Bank statements yesterday, dis
closing material repayment by member
banks Of their obligations at the central
institution, no doubt had a beneficial
effect on the market for stocks.
Foreign exchange rates also did bet
ter. The opinion still prevails, and II
seems well founded. that the recent de-
clines in foreign exchanges have been
due more to speculative causes than any
thing else. England, perhaps, may have
been seller of French and Italian bills
in the establishment OF dollar credits
here for the purpose of making a $780,
600, 600 payment on account OF interest
next month, but bankers who should
know just about what Britain Is doing
in the financial markets were unaware
of II.
1t Is unlikely, too that the political
situation in Italy had much bearing on
the fall of lire. for the first substantial
check of the decline came the day after
ha Sfex,,o - t.1t
was announced At It's high yesterday,
above 4.46, sterling was up nearly three
cents from the low OF the preceding day.
German marks gained fractionally, not
withstanding the further expansion OF
currency by more than 35 700. 900 marks
The time is now past. however, when
German exchange rates pay any atten-
ton to the continuous operation of the
Government printing presses.
Wall Street was very much interested
yesterday in the exceedingly optimistic
remarks of Judge E. II. Gary at the
meeting of the American Iron and Steel
Institute. Judge Gary has said sub
stantially the same things concerning
Americas tremendous resources and
wealth before. but just at this time
when all signs are pointing to a great
business expansion his remarks were
regarded with deepest interest. The
trade reviews, too. show that the note
Of optimism has real basis in fact
One declares that certain branches OF
trade are at the best level in two years.
with collections better than any other In
about year. Another points out that
not only has the expansion. and better
ment continued through the last week,
but has broadened materially.
Grain prices advanced sharply yester-
day. but cotton reacted ever so slightly
from the closing prices of Thursday.
Money rates on the Stock Exchange de-
clined from "a to 5 per cent. In the lat
ter part of the session.