The New York herald., 1922-05-20
FINANCIAL NEWS
AND COMMENT
Easiest Money Market in Five
Years Stimulates Rise in
Stock Prices.

The stock market had yesterday two
influences to consider. both stimulating.
to speculation for the rise of prices. The
hrst was the easiest money position that
had been experienced In nearly five
years. demonstrated particularly In the
placing of thirty day collateral loans
at 3N per cent. The other was the
emphasis laid on the outlook for a great
expansion of American industry by
President Harding in newspaper ac-
counts of his dinner on Thursday night
with forty steel men. That optimistic
view. coupled with the intimation that
no criticism Of pending steel merger
plans had been made by the Chief Ex-
ecutive. had an immediate reflection in
speculative operations. carrying United
States Steel to 101 ", a full point higher
than this years previous maximum quo
tation. and gradually extending pur-
chases throughout the industrial and
railroad share list. In many respects
the market paralleled the broad interest
and large activity of those active days
In April when the spring upturn was in
in the days trading went forward a
point to I points and the strongest pc
riod was in the last half hour.
Short dated collateral loans had not
per cent. since August. 1917. 1t could
not be said that yesterdays market was
established under 4, or even on a
per cent. basis. as the undertone be-
came slightly firmer in the afternoon
and in late borrowing Az was asked
for sixty and ninety day money. But the
dip to 81 in the morning was highly
significant recording plainly that the
banks had plenty of loanable funds de-
spite the current growth of industry.
The Reserve Bank statement for the
week showed that agricultural territory.
centered on Atlanta. Kansas City and
Dallas, was making progress in convert
ing old loans into cash. while In middle
Western industrial localities there was
enlargement of loans. A single week,
however, is not enough to disclose per-
manent tendencies. The outstanding fact
in this years Reserve report has been
the banks clear ability to care for their
obligations to the Federal institutions.
Cali money went yesterday to per cent.
for the first time since March. harden
ing to 31a before the end Of the borrow
ing period.
The stock market overshadowed the
other markets In point of interest, al
though the money relaxation was felt In
numerous bonds. Copper company con-
vertibles gained briskly. Liberty bonds
and several foreign Government issues
were firm and fairly broad list OF
manufacturing and railway company
securities gained a little ground. Steel
company men are to go over merger
plans with the Attorney General next
Wednesday, to-morrow's meeting having
been postponed. With the Administra-
ton evidently ready to hasten produc-
tivity and aid the reduction of uncm-
ployment wherever possible. Mr.. Daugh-
erty's discussion of steel conditions with
the steel makers promises to have In
teresting features. The market ceased
to shiver because Of freight rate de-
cisions to be made. Lackawanna. st.
Paul. Great Northern preferred, Read
ing and others standing with the leaders
in late operations. A rise Of point in
General Motors measured the effect OF
published figures showing marked gains
in profit in recent months compared with
profits of year before.
Silver reacted 2A cents an ounce.
losing most of this weeks advance. Far
Eastern exchanges went lower with sill
yer. and European rates were dull and
not much changed from Thursdays quo
tations. The security market, In fact.
was the only one to gain ground. as
heavy deliveries Of wheat forced futures
down again, and cotton options receded
IL to II points under realizing sales.