The New York herald., 1922-09-25
FINANCIAL NEWS
AND COMMENT
Near East and Money Rate
Situations Used as Factors
in Selling Stocks.
REACTION AFTER BIG RISE
Stock Market Appeared to Be
Due for Price Declines in
Past Week.

ket-has been far less shaky and lin-
settled than any other.
Exchange Rates Affected.
Foreign exchange rates during the
week did react, with some rather heavy
selling. but the line marking the end
OF purely commercial operations and the
beginning of those OF a speculative ma
ture. based on foreign DEVELOPMENTS
was not very clearly drawn. What is
known. however. is, that for days there
have been very heavy offerings of COM
mercial bills. grain bills in particular
and 1t is not without the bounds of pos
s!bility that the reaction in the rates
quoted for foreign currencies was due
almost entirely to those offerings.
If that be true, then it is certain that
the reactions In other markets have
been greatly overdone. for it would
mean that international bankers in con.
troll OF the exchange market feel nc
great alarm concerning the situation
In and about eastern Europe.
So Is Is possible that declarations made
early in the week that the European
news was being used as an excuse
rather than reason for the softness
of the markets have foundation. Ger
tain it is that the technical position OF
all markets. particularly the stock mar.
ket, was bad.
Stocks had had tremendous rise ovel
an extended period, without a reaction
OF consequence. Distribution had beer
the order for some little time and when
it was accomplished to an important de.
gree, there was little to support tho
| market against assaults from profes.
sional cliques. 1t Is to be expected ir
similar situation that these assaults
will be launched from time to time ir
the way Of tests Of the markets ability
to withstand them. Once weakness 1.
finally uncovered. the assaults have
their effect and a sharp decline ensues
A canvass of commission houses re.
veals the large extent to which distribu.
tion of stocks had been conducted prior
to last weeks break. One big house ac-
knowledged that s10.0O0.o0O worth OF
securities had been sold at the end of a
big bull campaign conducted by that
house just few days before the de.
cline got under way week ago Satur-
day.
Incentive for Realizing Sales.
Another house with AZ network ot
wires all over the country asserted that
it had been busy for many days before
the last big break in selling stocks
bought by customers at levels far below
those Of to-day. Profits in those stocks
ran as high as SO and rs per cent and
furnished real incentive for realizing.
There is no reason to believe that what
has occurred in those two big repre-
sentative houses Is not indicative Of
what has been happening through the
whole financial district.
The sudden and sharp tightening of
credit lines last week was a develop
n ent which has been expected, although
perhaps 1t was not warranted. going
further than anticipated. Call money at
per cent, some bankers said. was un-
necessary.
1t is true that tremendous Govern
ment operations. Involving the shifting
OF millions upon millions. placed a
strain on the money market which could
only result in higher rates. Huge pay
ments on account OF income taxes.
coupled with big transactions In con-
nection with Liberty bond interest pay
ments. dividend payments, &C. we're
bound to have an effect on the rate for
accommoda tions. Added to this was
the demand for funds with which to
remove imported goods from bonded
warehouses in ADVANCE OF the enforce
ment OF the new tariff act and its
higher rates. All these factors were
instrumental in determining the higher
rate for money.
Big u. =. Financing Reported.
There was great deal of consider
alton given to reports of huge Govern
ment financing under way. Washing
ton reports OF a proposed Treasury
offering involving approximately $780,
100000 as low as per cent. were not de-
MED in official quarters.
Quite few financial experts recalled
Instances In the past when the money
market was made to appear entirely
out of Its real character In order to
compel the Government. in It's borrow
ings. to offer n more attractive rate
than 1t intended.
The resumption of coal shipments on
n basis more nearly approaching nor
NAL has enabled industry to move ahead
with new force and here. too, the de-
mand for money has become stronger.
Current reviews OF trade conditions
are very optimistic They point out
a quickening OF demand IN leading
branches and assert that orders are
being placed more frequently to meet
requirements.
The steel trade has recovered re-
markably from It's slump occasioned by
the coal and railroad shopmen's strikes
and whereas average operations Of steel
mills now stand at 65 per cent they are
expected TO advance Immediately to
10 per cent. and better. n
In textiles, toe, the Improvement Is
broad and the level of all prices is ex-
pccted to work materially higher. Brad
streets review of conditions Is particu-
larly optimistic, asserting that I'm
proyement is the key word" and that
''the use OF the term In more wide
spread than at any time since early
last spring"