Omaha daily bee., 1922-04-24
Financial
Che Mem 1Urk @mss.
By ALEXANDER DANA MOVES
Omsha hss i-sssd Niss.


New York, April Alt was iorlur
nale ior the peace OF mind OF Wall
Street, al any rate. that the unbFoken
series OF million share markets since
the opening OF April. with their rise
IN prices, had not been based on eN-
peeiations OF results at Genoa, II
the Genoa conference had been what
the stock exchange calls the bull
argument" then the reaction OF
Tuesday following Gefmany's per.
iormanee and the political appre.
tensions aroused by Il. would have
been vastly more severe.
But financial judgment. although
hoping Tor the besA when the con.
terence assembled. was entirely re-
served IN It's expectations. The ci-
irontFy OF the Russian delegates.
their presentation OF a claim OF their
own Tor 2,O0o.000.000 gold rubles
against the allied governments. was
taken IN financial circles as quite
inevitable incident oi the introduc.
ton OF soviet sans euloties into the
atmosphere OF diplomatic iroek coats
and top hats. aud the feeling tha,
Germany's delegates would somehow
make a mess OF their part in the
negotiations had been pretty pre-
valent, even before Mondays an.
nouncement.
Europ~sn Stocks Advance.
Even on the European stock narleis
the advance In sildsedKed securities oan.
tihued after the news ot the ilussn-Grr-
man treaty. British war loans maie
new high records two days Afterwards.
our own investment bond market - not
even halt aud the setback ~ the sock
market turned out 20 bs hardly more
formidable than tho familiar Tuesday
reaction" Most eonseryHty. people IN
Wall street. indeed. expressed Eratifica-
ton that Just such n reaction In prices
should have occurred. that both the 'pro'
fessionai OPERATOR and the outside pub.
lie" should have received so early and
sharp n reminder Of the pitfalls which are
sure 10 surround unbrldled speculation for
But ~ "Genos" was not a real influence
ON the financial markets either last week
or tho week before. the money and invest
ment. situation was, and It's Influence con-
tlnucd. IL In true the federal reserve bank
Wednesdays meeting. notwithstanding the
fact that sharp reaction In the treasuryu
ratio for government short-term loans had.
up to that time usually been the forcrun-
ner OF such action.
Wall Street Disappointed.
Wall street spoke OF this failure 10
reduce tho reserve bank rate from the
present Al per cent level even after n
per cent rate had been fixed at the Bank
OF England as disappointment. Cir
cumstances will undoubtedly govern the
reserve hanks action during the next few
weeks or months. but II is a reasonable
guess that at present the policy OF the
system Is to be based on the principle
that, with conditions what they Just now
are In American markets, the rodlscount
rate ought to be kept we'll above the
open market.
The mistake OF 1919 Is not likely TO be
repeated when, during 10 months In that
year Of excited speculation, private banks
which were getting 5ia to per cent in
the open market for their loans on COM
mercial paper and nearly as much for
their loans on Liberty bond collateral.
were able to rediscount these very loans
at the federal reserve for 4 per cent
That policy was partly a consequence of
the war pledges made by the treasury
to subscribe ers in the 1918 war loan drives,
but the results were most unfortunate
1t had hand unquestionably in permit
ting the wild forestalling craze to SO 80
far in all the speculative markets that
when the reserve banks were eventually
compelled to change their policy. the
collapse Of the markets was OF the great
est Imaginable severity.