New-York tribune., 1922-06-19
LOndOnP OsitiOn
lsAided by Cut
I'm Bank Rate
Reduction Believed to Have
Been Inspired by Attempt
To Check Setback in
Gil, Edged Securities
Stock Prices Respond
Commercial Circles Under
No Illusion Action Will
Suffice To Restore Trade
Fror Ths Tribs-,'s rsror,as Bsreas

frew INC IfiHtHFa ftrnffrH Nsff1H
coYyriEh, 1874. Ssw YORK Tribune Inc.
LONDON. June ls.-London again
has strengthened her position as the
cheapest market u the world Oh which
% borrow. due 20 tie further reduction
% the bank rate o. - per cert an
nouneed Thurtday This distinction
has been the foundation of Londons
monetary suprcmacy. and the latest
cut in tre rate will Inspire confidence
abroad as well as az home. 10 is hoped
IN financial and commercial circles
here.
There s. \ great deal of speculation
regarding the action o. the directors
Of tho Bank of England IN reducing
the rate 40 this time. The most com
mon explanation is that the action was
inspired IS The Treasury ia an attempt
20 check the recent setback in gilt
edged securities. the continued ad-
vancos Of which q short time apo were
making practicable the Chancellor Of
the ExcheQuers hope % a great re-
funding loan. The funding Of the debt
is necessary step In the reduction
Of taxation which has been called for
as imperative b. trade and Industry.
lrNhluh iNdH
Another cause assigned FOR the rate
cut is the iact that the Bank Of Eng
land Is the issuing house for the fi2,-
500, 600 Indian loan now being offered.
a good part of which is likely 20 be left
IN the hands of the underwriters.
Cheaponirg money due ~ the cut re-
suited Immediately In a perceptible in
crease in subscriptions 70 this loan.
This is the seventh successive redue-
ton IN the bank rate since the spring
Of 1920. when y was raised 20 per
cent in connection With the policy Of
imitation then being pur'ued, and the
rates arc now a; the lowest point since
the threat of war in July. 1914. began
20 change all values.
The reduction closely followed the
decision of tho New York Clearing
House Association 70 cut the Interest
rate on deposits. 10 is noted here. The
Bank ~ England cut also Is believed 20
have been partly inspired by the better
labor situation, aith The settlement of
the protraeted engineering dispute.
Market Responds
The Stock Exchange responded IN.
raedihtoiy % the prospective influence
of cheaper money, ard frst-class in
yestmcnis. which had been depressed,
are making good rallies. while The tone
o. the market for speculative seeuri-
ties has hardened appreciably. Al
though the reduction naturally "a vel
coined b. tire trading community, there
o no illusion IN commercial circles
here tha. cheaper eTcdi. alone VAL
suHlce % restore normal conditions.
The view Is generally expressed 'ha,
prospects II trade being assisted by
cheaper money arc not very great 80
long as European conditions are IN
settled.
The prospects FOR the Hague con-
ference, looking 20 the revival q Rus
sia. does not seem 20 be regarded very
favornbiy here. the opening Of tho con-
ference having had practically no ef-
feet on the exchange market. There
was q sharp break in marks earlier In
the week. with francs and lire falling
in sympathy. on the news u the bank
ers' committee being unable 70 make
n loan % Germany. Later, however,
French exchange improved. and marks
rose % less extent, On the news
from Berlin that the government was
preparing % pay the rerGrat!oa IL
stallmert Thursday.