The New York herald., 1922-06-22
FINANCIAL NEWS
AND COMMENT
Constructive Factors Keep
Stock Market Firm-Call
Money Renewals 2 "a PC.

Ihere was little change to be seen In
the character of yesterdays stock mar
ket from that of Monday and Tues
day. The day was begun with sharp
up-bidding of Mexican Petroleum which
stock continued it's gyrations to another
new high OF 179, and these operations
Influenced the rest of the list and
caused higher prices all around. just as
they had done on the preceding days.
One thing seems certain now; either
the operations of the last few days in
Mex. Pete" have been so reprehensible
as to merit drastic action by the New
York Stock Exchange authorities. or
there are new developments within the
company which have not yet become
known to the general public and which
warrant the almost incredible advance
of almost fifty points in about week.
1t does not seem hardly possible. how
ever. that a pinching process against
the short interest could have accom-
plished alone the remarkable move in
the stock unless a real corner existed.
There are many observers of the market
who are inclined to believe the stories
of new and valuable territories having
been opened. which end for the present
at least the fear that Mex. Petes
properties will be entirely barren OF
oil relatively within few months.
The reduction of the rediscount rate
by the Federal Reserve Bank from 41a
to per cent, which was announced
after the close. was not entirely unex-
pected 1t had been forecast for some
time by the action of the bond market
and by the current quotations for
money. The reduction of the Bank OF
England rate last week from to 3 "
per cent was another straw in the wind.
With the renewal rate for call funds
down to 2% per cent yesterday for the
first time since October, 1917, and with
the money market having gone through
the strain of quarterly Government
transactions with scarcely ripple on
the surface, it was quite obvious that
some such step might be expected in the
near future. That the new rate is not
even lower, or that cut has not been
made previously Is probably due largely
to the feeling, of financial leaders that
it were better to move slowly and eau
tiously than to act precipitately, thus
encouraging new over-expansion ana
undoing much of what has been done 10
correct a bad financial situation in the
last two years.
Reports from Industrial centers con-
tinue to be of a constructive character.
The steel reviews indicated yesterday
that that industry is beginning to feel
the effects Of the coal strike In an I'M
portant way for the first time So Tar,
however, production has not been cur
tailed and the only noticeable effect has
been a stiffening of prices. AS to the
outlook for the steel industry for the
immediate future. there seems to be no
modification of the opinion expressed
times without number that no recession
cf buying Of steel and steel products Is
in sight.
In the stock market yesterday. stocks
went ahead altogether too swiftly in the
earlier trading, and. as result sharp
reaction occurred just before the close
which Clipped some substantial portions
off of the days best prices. On the
whole, however, the tone was one OF
strength and It appeared that some
thing besides the obvious short covering
of the first two days this week was
back Of the demand for stocks.
Foreign exchanges were little lower
yesterday. The rally OF Tuesday
brought out fresh commercial sterling
bills and q moderate recession re-
suited. The lowering of the rediscount
rate here is expected to have stiffening
effect on sterling exchange. for bankers
have pointed out repeatedly since the
Bank Of England reduction last week
that continued spread of full one
per cent. between the two rates would
be certain to bring flow Of funds from
England to this country for investment
which. in turn, would have decidedly
depressing effect on sterling exchange
Both the cotton and grain markets were
lower. the former declining about 35
points on bearish weather reports.