The New York herald., 1922-06-11
FINANCIAL NEWS
AND COMMENT
Oils Lead Sharp Stock Market
Reaction-Bank Deposits
Show Big Increase.

The recently enlarged speculative ac-
counts on the rising side of market
values received another blow yesterday
when oil shares led a sharp reaction
on the New York Stock Exchange and
In the curb. In effect, the selling move-
fnent was a continuation of the break,
which began early on Friday afternoon.
although its genesis lay in the sluggish
state Of trading which existed in the
last, half of May and the fore part Of
June. Several quondam favorites Of
spectators. including Studebaker, Stand
ard Oil of New Jersey, California and
Indiana. -eceded to more than 8
points. and weakness marked most of
the industrial list and part of the rail-
road group. Reports that extensive SELL
Ing of copper, oil and low priced rail-
road shares had come from Amsterdam
and London raised the supposition that
the three months postponement of fur
ther consideration of a German loan
had upset speculative plans overseas.
But an explanation of that sort was
not necessary to serve the market The
domestic interest in stocks. of course,
is. much greater than any foreign par
ticipation built up this year, and the
setback Of prices undoubtedly reflected
sales by disappointed buyers at the tail
end of the spring rise. and also the
efforts of professional hands to seize
profits on the short SIDE
AS is natural, after several days Of
reaction the trading element searched
everywhere yesterday for detailed rea-
sons for the altered stock market. The
United States Steel Corporations report
on bookings. on May 81, showing an in
crease OF 1871 tors. was thought in
some quarters to denote a falling off in
business compared with figures for the
two preceding months. The point that,
even though the increase in orders was
only about a quarter Of the unusually
largo expansion in April. the aggregate
of contracts when last month closed
was close to 100000 tons more than it
was on January 81 was overlooked. The
May increase was quite in line with ex-
pectations. based on knowledge that
contracts were not being sought with
of the coal strike and also on informa-
ton that mill output was fully as high
as in April. The corporation, like some
Of its competitors, has been increasing
its working force as rapidly as skilled
men could be obtained, and the outlook
for the current quarter is that net earn
ings Will be close to il not in excess
of s30.000,000.
The stock market recession has re-
ceived. perhaps, some Of its recent i'm
petus by Wall Street reference to the
amount of estimated bank credit being
used to finance securities on margin. A
calculation few days ago, which sug-
gested that loans were as large as they
were in October, 1873 month when a
bull movement was drawing to its cul-
mination--drew attention to measures
occa sicnally used to reduce a topheavy
loan account. That may be best de-
scribed as shakeout. But. IL there has
been nervous selling because Of loan es-
Inmates, it has not made allowance for
the decided ease of money rates and the
continued tendency of loan contraction
In the Reserve system. Although loans
of the new New York Clearing House
banks have increased 8 per cent. since
the first week of March, and z per cent.
since April 4, the Reserve record has
been the opposite
The loan increase reported by the as
sociated banks in New York amounted
last week to s37,o00.oOo. but. at the
same time, demand deposits increased
by nearly s50,0oo.0oo and the time de-
posits sweled to almost $4,000, 900
more than the aggregate Of the preced-
Ing week
Cotton moved upward again yester-
day. 10 to 20 points for futures. while
the spot price here went to 22.S0 cents
a pound. new high record for this sea-
son. Foreign exchanges sagged.