Evening star., 1922-10-14
ny STUART II. WEST.
Special Correspondent of The Star

NEW YORK, October 1.-THE i'm
tion Of the past week were the success
of the new $500, ,0o0. 900 government loan,
the continued ease In the money mar
ket despite the heavy demands Of the
crop moving season. the new recapi-
talization plans with accompanying
stock dividends announced by sew
eral OF the large Industrial corpora
tions. and the fresh collapse in the
German mark.
How far the government financing
with the prospect of good deal moro
Of 1t during the next six months, Is
responsible for the check to the In
vestment market, and how far this Is
due to the feeling that money rates
have seen their low, Is question.
But at all events bond prices have
definitely stopped going up and the
disposition Of large investing insti-
tutions and wealthy capitalists gen
orally Is rather to sell than to buy.
A Discriminating Stock Market.
In the stock market the situation
is quite different. Speculative cliQues
do not SO much care whether they pay
4 per cent or per cent for their
money. so long as they are assured
that their credit supply will not pc
cut down. With ample credit the
operations is company earnings now
and for the future.
Between individual companies there
are wide differences OF position. Inc
majority are making normal pre-War
profits, a number are feeling the eI-
operating with only small balances
to the good, and 4 few are unusually
prosperous.
The stock market, taking cognizance
Of these differences, Is not moving as
a unit, but is discriminating carefully
between the stocks OF industrlai COT.
porations that arc doing well and
those that are not. In speaking o1
the business situation these irregu'
larities have to be taken into account
In most lines there is improvement
as compared with the spring and sum
mer and seemingly a gradual tend
ency toward further recovery. lr
other lines the position Is less salts
factory and the outlook more uncer'
tain.
Borrowings Increase.
The advance Of over $s0000,0o0 ir
borrowings from the reserve banks IL
the largest increase that has occurred
in any week this year. 1t rehect:
three distinct operations, frst. tht
financing Of subscriptions to the ne"
government loan: second. the niiine
of the normal demands in the agri-
cultural sections. and, third. the han
ding OF the larger credit require
ments occasioned by the recent rise
in Wall street prices.
The reserve ratio OF the federai sys'
tenn as a whole ia now down 8 per
cent from what II was two months
ago. but the expansion in rediscounte
and note circulation is quite unim
portant when measured by the huge
total Of the innationary period OF two
In other words, the money market Is
two-thirds Of the way through the
trying period of the crop moving
period which In the past has involved
great strain, high money premiums
and freouent stock market collapses-
and yet money rates are only up II
to l per cent from their extreme lows
OF the early summer.
So far the splitting up Of capital &C
counts as an argument for higher
nrices has been rather overdone. ir
the same way that FIVE months age
speculative Wall street deceived itsel1
about the effect Of the steel mergers
The multiplication Of share units does
not add to the selling values of stocks
unless it entails a larger return &c
the stockholder. This was perceived
in a special manner when following
the 400 per cent stock dividend b!