The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1922-02-16
DISCOUNT CUT
lSFEATURE IN
STOCK MARKET
BIZ STUART P. WEST.

wall Streel, new IOrks zen. ID.
REDUCTION OF the Bank Of Eng
land disconnt rate from S to Al
rsr cent was the outstanding incl
Sant In the markets today 1t Was
MT unexpected because of the sus-
tension announced on Tuesday OF
further Issues of the short term
british treasury bonds. The sig
uifcance of this was that the ex-
traordinary borrowings of the war
and postwar periods were over and
20. relieved from the necessity Of
handling this government financ-
ing. the bank could afford to put
its rate Of discount back to where
n stood in 1914.
The action OF the English bank is
another measure of British econom-
ical recuperation scarcely less i'm
nortant than the rise of the past
month in sterling exchange. 1t
means that credits viii be available
for English borrowers on the terms
which used to prevail before the
war. II means also that the time
has arrived in English financial af-
fairs when complete removal OF the
restraints upon the credit supply
is felt to be justified.
The last occasion when the Eng
Iish rates were lowered was on
Nov. 3, 1921. The same day that
the English authorities reduced
their quotation.
Nov. 3, 1921. The same day that
the English authorities reduced
their quotation to 5 per cent the
Federal Reserve bank of New York
put its discount from 5 to 4 II per
cent The close correspondence be-
tween the two actions three and a
half months ago makes the deci-
sion of the American bankers now
of particular interest The whole
money market was obviously get
ting ready today for another cut in
federal reserve rates. These prep
arations were more especially evil
dent in the marking down of the
figures on call loan renewals from
Az to per cent and in the active
demand for bankers acceptances at
the new low figure of per cent.
The reaction of these multiply
ing signs of cheaper money on
both sides OF the ocean was a fur
Their advance in investment securi-
ties especially in American and
in English war loans, and on the
stock exchange in some OF the
standard dividend paying railway
shares. The rise in Liberties which
was fairly sharp, also of course
was a further expression of relief
at the way the bonus situation was
developing at Washington. Wheth-
II
posal for a general sales tax can
be pushed through a reluctant con-
gress is something which Wall
street like the rest of the country
can only guess. But publication of
the presidents plan seems to af-
ford vitality stronger ground for
believing that congress will have to
either swallow the sales tax or
postpone all bonus legislation in
definitely.
The criticism regarding today's
stock market might reasonably
have been that for the greater part
Of the time the tendency seemed to
be upward, a disproportionate OF
attention was given a very few Sc
lected shares. 1t looked as if the
plan of campaign was to concen-
trate efforts upon two stocks
Mexican Petroleum and U. S. Steel
Common-and allow the rest of the
list to follow or not as it chose.
Such methods in the past have
often been a screen for important
profit taking.
Whether this was the construc-
ton to place on today's operations
or not, the market did become in
creasingly irregular. There was a
time when the rails were pushed
forward bit under the lead of the
anthracite coal carriers, but this
move quickly subsidized. On the
other hand, operations for the rise
went more successfully in the cleo
trio stocks the telephone and tele-
graph shares and some of the i'm
penalties.