The New York herald., 1922-05-12
FINANCIAL NEWS
AND COMMENT
Steels Lead Late Recovery of
Industrials in Heavy Trad
ing in Stocks.

Rapid price changes in several mar
kets, some Of them accompanied by
dramatic developments, made yesterday
ne of the most interesting sessions Of
this year. Dealings in stocks again
comprised more than 1.00o,c COO shares,
and, while the fluctuations we're per-
sistently toward lower levels in the
morning. an abrupt recovery Of indus
trial shares took place in the afternoon
led by Lackawanna Steel. Republic
Iron and Steel. several minor steel
Issues and several specialties. The buy
ing of Lackawanna. ca rrying the quota
ton over a range Of SO points and
leaving ii with net gain OF points.
that a merger of that company and the
Bethlehem Steel Corporation was under
way. The news of that program. being
unexpected, supplied one spectacular
feature 20 events. Another came In the
demoralized retreat of the short interest
in May wheat. heavy purchases in Chi
caso carrying the price up ~ cents a
oushol. The Significance of that bulge
lay principally in miscslculations which
short sellers had made about the de-
rpand for grain. The immediate absorb
tion OF 1000, 600 bushels cf whea. shipped
in for deliveries on May contracts be-
tokened a demand which suggested that
the underlying state of the market wa
much stronger than specuiators had
believed it to he 3 fortnight. ago. The
other grain options also I'd forward
briskly.
The Bethlehem -Lackawanna merger
Plan presumably will not alter negctia-
tions for the consolidation of six COM
psnies in another group. The Lacka-
wanna was originally expected to ngurc
in seven company merger. Outside OF
the economic Importance Of Tic regroup-
ing of large producing concerns it is
plain that tho formation of two large
units to compete with the United States
Steel Corporation instead OF a single
great competitor lessons the chances of
collision with the Sherman law. q minor
consideration, perhaps, but worthy of
study In the present keen state Of bus-
ness rivalry and partisan politics.
Stocke looked decidedly weak in the
morning. At the bottom prices the
average of active Industrial shares was
three points or more under this years
recent maximum. and the enlarged busi-
ness. compared with that of Tuesday
and Wednesday. indicated that short
sellers were becoming more confident.
The afternoon rally was not sufficient
to remove all earlier losses. but, in the
irregular array OF quotations at the
close. many substantial advances were
noted.
The supply OF call money Offered In
the Street was sufficiently large to
break the rate from ~ per cent. to
1-3 per cent. before all cf the days
| loans we're arranged. in bonds there
was not much change in trading con-
ditions. Liberty bonds were firmer and
the same slow sagging of minor railroad
issues occurred as on Wednesday. The
weekly Reserve statements contained
no items suggestive of firmer money.
The systems gold holdings increased,
carrying reserves s1i.000.000 higher
than they we're week before. The
liquidation of loans. which had paused
in the preceding week. was again re-
sumed. bill holdings falling $50. 500 900,
and as deposits receded and circulation
declined si7,400.o00. the ratio OF cash
to deposits and notes advanced from
1851 per cent. to I7.3 per cent.
Cotton was under pressure for time
but could not resist the upward surge
in other markets. closing II to "a points
higher than II did on Wednesday. The
foreign exchanges were firm.