The New York herald., 1922-01-16

TcfIcct PRIMARY cnangcS IN tnc situation
of money and credit more directly than
stocks.
Explanation in Reserve Bank.
The rise OF we'll placed stocks. never
theless, shows at this time IL broader
conception of the monetary outlook than
had been noted before, and the explana-
ton lies primarily in the fastest state
ment OF the Federal Reserve system
A decline OF more than s125. 900, 900
in rediscounts. together with contrac-
ton of s11f,517.00o in circulating Re-
serve notes and fall OF $4,000, 900 in
holdings OF bills bought in the open
market. these items betokened flood OF
money into the member banks and the
rapid liquidat tion OF loans. Besides, some
soo.o00.0o0 was added to the gold re-
serve in the last week Reserve Bank
rcdiscounts recorded in .he combined
statement were 60 per cent. less than
in the same week OF last year. The
total OF outstanding Reserve and Re-
serve Bank currency was just about
$1,000. 600. 900 less. decline Of SO per
cent. The gold reserve was sS1o.ooo.-
900 larger.
The New York Banks gold reserve
was almost .hrce times as large as 1t
was year before. The holdings OF
bills. mostly representing loans to men,
hcr banks. were less than onc-fourth the
amount reported in the second week of
January. 1921.
The matter OF chief interest just now,
however, is not involved in the facts
but in what is likely to happen next.
There is room to speculate in this con-
ncction about the New York bank
probable action in respect TO the redis-
count rate. Every one outside the man.
agemcnt believed that tho rate would
be marked down last week from ~ to
4 per cent. AS il was not the rate OF
~ per cent. remained suspended at tho
same level as .hc commercial paper and
collateral (time) loan rates and three
quarters OF / per cent. above the mar
ket rate for acceptances. That Is sit
nation which the leading foreign GEN.
trail banks seek to maintain at all times
sp~culntIng on bank Rate.
VIII the New York bank continue 70
hold it's rate up. process which WI
discourage borrowing and encourage ths
Liquidation, Of Old loans? This question
interested Wall Street nightly, for !.
was thought that the decision about the
rate. when made. would dsternlinr
vhothor the bank intended TO permit the
old method 10 stand or to follow the
ractice OF other countries. which fore
banks OF discount TO m cet the demand
from customers from their own re-
sources when tho use OF money is on .
normal scale.
The markets were directed almost en-
,ir az by tho money situation. The in
side OF French politics is not wcu
enough understood on this side to make
AN event like the fall Of the BRAND
Ministry much or market influences
The n,ws from the industries was
vague as Is customary at this season
OF the year. and few events came to
light TO change the impression which
existed sf tho end OF 1921. namely. ths'
the prospoc, Is for gradual growth oi
business. with the likelihood that little
positive force will appear until sprine
arrives The fact that Germany bcgar
TO make payments OF the January :
rcparaticns installmcn,. the first deposit
in New York amounting TO si2.oco.ooj
secmcd to show that the German Gov.
,rnment was making an effort TO meet
demands. but the Significance OF this
was lost in a maze OF conflicting re-
ports from European ccntcrs about the
1 entire reparntions plan.
PENNsyLvANfA OIL MARKET.
| on CRY. Jan. 15.--CredIt balances