The New York herald., 1922-02-17
FINANCIAL NEWS
AND COMMENT
Stock Prices Little Influenced
by Outside Events-British
Bank Rate Cut.

The security markets took comfort
yesterday from developments in Wash
ington respecting the soldiers bonus
situation and significance was attached
to the reduction OF the Bank of Eng
lands rate OF discount from per cent.
to 41a per cent. but there was hardly
any reflection OF the days leading
events in prices. In stocks it looked as
though strong advances Of United States
Steel. Mexican Petroleum and two or
three other Industrial issues were used as
cloak for covering extensive realiziny
sales in many parts Of the list. Cot
ton lost ground and wheat futures re-
ceded rs to is cents bushei in Chi
cago. The foreign exchanges were
barely steady and became heavy when
ever offerings Of bills increased. Market
action generally indicated that specuia-
tors were inclined to halt their opera
tions for the time being. a decision
which, In n rising price period, usually
brings q reaetionary tendency as the
result of sales by traders who have
good sized paper profits.
Although the marksts made ,.rtie ac-
count OF outside events. it was clear
that the situation as affecting the future
of business and trade was made more
favorable than 1t had been. Ths mark
ing down Of the British banks rats
was the signal that pressure Of emer-
gency Government financing had defin-
iteiy ceased, permitting the course OF
money rates to be governed by demands
OF commerce and industry. The sup
position that the local reserve bank
also would let its rediscount rate down
soon was voiced IN many quarters. sup
ported by current evidence of an easy
money situation. Call loans were re-
newed at 4 per cent. and supplies we're
abundant. But 1t remains to be seen,
cespite important strengthening OF most
reserve bank reserve positions in the
last fortnight, whether or not the local
banks management will be moved to re-
duce the rate prior to the time when
spring demands on banks In all parts
CT the country can be estimated. The froz-
en- loan situation ievastly improved from
what It was three months ago, and IN
consequence the loans OF reserve banks
to members have been cut down rapidly,
but there Is still room for improve
rncnt In certain sections and the Reserve
Board probably would iilee to see the
aggregate of rediscounts lowered further
before paving the way for fresh borrow
ing at rates lower than those courrent.
In the last week the New York banks
rediscounts secured by Government obli-
cations were reduced s25,154.000 ond the
aggregate Of all bill holdings declined
more than $4,000. 900. Total deposits
decreased about st7,0o0.Ooo and out
standing circulating notes expanded
elightly moro than se.oo0.000 The
bank. however, was again moderate
settlement fund, and the product Of those
changes was only O slight alienation Of
the ratio Of cash to deposit and note
liabilities. the movement being upward
from S1.7 per cent. to S1.9 per cent.
The systems reserves increased sl3,30o,-
600, while deposits and circulation were
not much changed from those of the
week before. The statements threw no
fresh light on next weeks monetary out
look.
The foreign bank statements were IN
teresting. as. In addition to reduction OF
the Bank of England's discount rate
showing an improved position. the Bank
OF France reported @ reduction ot 1.s0o.-
100000 francs of circulating notes.