The New York herald., 1922-10-27
FINANCIAL NEWS
AND COMMENT
Prices Wither Again in Stock
and Bond Markets-Lack Of
Public Participation.

Acute weakness in both bonds and
stocks marked operations in Wall
Street yesterday. Liberty bonds We're
under heavy pressure and a notable
but puzzling feature was the persist
ent selling of the new Treasury Az
PEI cent. bonds which at one time In
the session were at a discount of $50
on a sl.000 bond.
The weakness in Liberty bonds easily
can be explained by the selling by
banking institutions which still Is
uncompleted. 1t is paradoxical that
the banks which only a fortnight or
so ago subscribed to the new Govern
ment bonds already would be selling
them at a discount. AS matter OF
fact. when the issue was first an
nounced there was no little buying of
them at a premium for interests who
desired large blocks but who realized
that their subscriptions would be SUBJ
stantially reduced by the aliotments
In the stock market there was the
same element OF uncertainty and doubt
that has marked every session for the
last ten days or more. No definite
trend was established by the crratic
fluctuations of the day, and IL there
was nothing to Indicate that the re-
was equally true that nothing could
be said to show that the end of the
upward movement has been seen. Pub
lie participation still seems TO be miss-
ing from the day 10 day operations
and professional hands still guido tho
course of prices. The market was
dominated entirely yesterday by the
professional element and evidences of
stock purchases by pool operators who
had been able to distribute their
stocks at substantially higher levels
were plain to be- seen.
What the market seems to need most
at this time is leadership. The public
following necessary to rising market
cannot be attracted by such dips and
flurries demonstrated for week or
more nor Is the outside interest en-
coura ged by the acute weakness OF the
late trading yesterday when the large
majority of stocks touched the days
lowest levels. Certainly there is
nothing wrong with business that has
not been apparent to everybody for a
long time; therefore the decline can
not be laid 10 sudden realization OF
anything unfavorable in fundamental
conditions.
The spectacle OF brokerage loans at
the highest figure they have ever
touched perhaps has made outside In
terests that otherwise might be in the
market hesitate But the credit situa-
ton to-day is so vastly different from
any that has ever been seen that such
a point means little. Brokerage loans
above the high total of 1919 may appear
dangerous, but the basis of that credit
is far more sound now than 1t was at
that time.
The cotton market underwent q sharp
ant nnIx
a normal movement after more or
less violent rise. Like the stock mar
ket, the cotton market Is almost wholly
in the hands of professionals and yes
terday's fluctuations are quite mean
ingless, except as they reflected techni-
cal considerations.
It Is equally true that the September
railroad reports now being published
can scarcely be held RESPONSIBLE for the
weakness In railroad shares. In the
first place the poor showings for Sep
tember were expected. Heavy operat-
ing charges incident to the railway shop
mems strike were known to be eating
heavily into revenues and the only Won
der of ii is that the reports arc not
even worse.
The weekly statement Of tho Federal
Reserve system disclosed that member
banks have been active In repayment
of loans during the last week. redis-
counts on commercial paper declining
from S316.a44.O00 to s273,ss9,o 900. The
reserve ratio jumped from 75.2 per cent.
to 77.6 per cent. At the New York
bank commercial rediscounts dropped so
per cent. to s22.o0o.0o0. while discounts
on Government paper expanded less
than s6,000,000 Deposits here were
lower by see.ooo.Ooo and circulation
smaller by approximately sl0,o00,0o0
The ratio OF the New York bank in
creased from 1871 per cent. to sS.4 per
| cent