The New York herald., 1922-01-06
FINANCIAL NEWS
AND COMMENT
Heavy Tone of Stock Prices
Attracts Much Short Sell
ing-Cotton Weaker.

The action OF yesterdays stock market
was much similar TO its behavior on
Tuesday. q heavy tone OF prices soon
after the start of business attracting
considerable selling for the short ac-
count. with consequent quickening OF
trading as quotations receded. There
were nc outside developments TO cause
pressure on stocks. Cotton, which had
advanced abreast OF the share list on
Wednesday, also turned weak and the
average of option prices was 50 a bale
lower at the close. Apparently the lack
of fresh influences to help spectators to
take their bearings for the next few
weeks was a factor behind the reaction
in both markets. The Street heard much
talk in December about setbtck being
end of the old year 1t was possible that
spectators for the fall of values had
set out to make the most of their oppor-
tunities this month. The passing of the
General Motors Corporations common
stock dividend gave them material with
which to work among the automobile
and tire company stocks, and uncer-
tainty in regard to crude petroleum re-
acted unfavorably among oil shares.
The industrial shares were a point to
points lower at the close of business
| than they were on Wednesday.
A feature OF the banking news was
the plain fact shown in the comparison
OF last weeks report with the statement
OF the Bank of England that year end
settlements had, relatively, much less
effect on loans and reserves on this
side than they had overseas. Tho Re-
serve SYSTEMS ratio of cash holdings TO
note and deposit liabilities was un-
changed from the I'll per cent re-
ported for the preceding week, while
the British bank. because Of heavy ex-
pansion OF loans and deposits, saw its
proportion of reserve to liabilities re-
cede from 1851 per cent. to 11.04 per
cent. The latter was the lowest figure
in nearly twelve months but It was well
above the $50 per cent. reported for
the week ended on January 6, 1921. It
Is the usual thing for loans of the Bank
OF England to expand broadly in the last
week OF December and the first week
Of January, with substantial reduction
in the next three weeks. Consequently
the latest statement recorded no unusual
changes. The Reserve report showed a
decrease of $3s.0O0.OO0 in outstanding
Reserve notes, but an expansion of s64.t
100000 in gross deposits offset the cir
culation item in its effect on reserve
ratio. Rediscounts (loans) instead of
expanding declined no less than sse.-
100000.
The contraction of borrowings by MEM
Der banks. although rejecting a seasonal
reverse flow of funds after the loan ex-
pansion Of December. Indicated also
that the money situation was fully as
easy as bankers predicted that 1t would
be. Yesterdays call loan rate went
down from per cent. to 4 per cent, and
there was much more time money Of
fered at per cent than borrowers
wanted. Government war bonds were
firm, several rising more than a quar-
ter OF point. and corporation issues
were fairly steady. The large output
OF new bonds early in the week ap-
peared to have supplied the market with
moro than could be absorbed imme-
diately. but banking groups were known
to be preparing actively offerings for
the near future.