The New York herald., 1922-01-07
FINANCIAL NEWS
AND COMMENT
Money Easier-Stocks Weaker
Under Raids-BOnd Prices
Have Firm Tone.

The easing money situation was en-
phasized yesterday In decline OF ninety
day loans on collateral from per cent.
to AZ per cent. and In the establishment
OF a 31s per cent. call loan rate on the
New York Stock Exchange. 1t was the
first time in three years that fixed period
funds had been placed at so low a rate
as Az per cent. and demand loans had
not been made in the so called official
market at 3is per cent. since July 2S.
The trend of rates fully bore out the in
dication OF rapid accumulations OF
money In the banks which was supplied
In the reserve systems last statement,
loans to member institutions receding
more than SCI, 1000 600 and Reserve note
currency more than SIS. .00O. 900 in week.
The fall of interest rates. which has been
made possible by a light demand as we'll
fresh expectation that the local Reserve
rediscount rate will be lowered soon, but
1t is likely that consideration will be
paid by the banking authorities to the
probable demand of the early spring be-
fore new action is taken in respect to
rediscounts.
The stock market made no response
whatever to the fall of money costs,
but bond prices had a firm tone all the
way along. Liberty bonds were much
more active than were others and one
or two advanced nearly a half point.
The relation between money rates and
bond prices has been discussed so much
in the last six months that there is no
need to refer to it here, but the impli-
cation contained in the money movement
Is that foreign Governments, municipa.
lities and corporations will be active
borrowers In the next few months. In
April and May the financing Of crop
planting makes a seasonal demand on
the credit market and If 1t should be
coincident with an increased call fol
funds from the industries, undoubtedly
there would be stiffening tendency in
costs in those months.
The stock market seemed to consist
mostly of professional attempts to seize
profits through raids against particular
issues and through short covering OF
other stocks depressed earlier in the
week. Although the list began to weaken
in the last half hour Of business. there
had been a moderate advantage on the
long side in most Industrial shares. The
market gave no inkling about tendencies
in the next few days. The active list
was not quite as broad as before, and
the scope Of trading was smaller than
II was in last years closing sessions.
An advance OF cent pound in ster-
ling exchange and a firm tone of francs
and marks suggested that speculative
purchases had been caused by events at
the Cannes conference. The decision to
hold financial conference to include
nearly all nations directly concerned in
reviving European industries and IL
nance was considered In banking circles
as a step of first Importance In finding
way to overcome the vast difficulties
which face Europe. 1t seems that Ger
man reparations payments must be a
prominent subject in the deliberations,
which may be a reason why so little
has been heard of late about Germanys
plans for meeting this months INSTALL
ment.
Cotton quotations started irregularly.
several options recedlng 20 to 30 points
in the forenoon. but later there was fair
recovery. Closing quotations, however.
were to Is points lower than they were
on Thursday. Wheat lost little ground