Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1922-01-23
MONEY SUPPLY
LEADS TO MORE
ACTIVE MARKET
Liquidation of Loans in East
Provides Funds for
Investment.
LEGISLATION WATCHED
Special to Indiana Daily Times
and Philadelphia Public Ledger.
BY MONITOR.

N~AAN@
BY MONITOR.
NEW YORK. Jan. 23.-Stocks have
shown more activity and strength in the
last week than at any time since the
turn of the year. Quite apart from the
fundamentals, which naturally are ex-
pected to assert themselves rather slowly,
two speculative features have come 10
he front as stimulants to buying. One
is the perfectly logical tendency for spec
uation to develop under present money
and business conditions. The supply Of
funds is increasing as a result Of COM
modify liquidation and reluctance to en-
gage in new enterprises The liquidation
Of loans in the New York Federal Reserve
region has been enormous in the last
year. IN fact the same phase is appar-
ent throughout all the industrial and
commercial centers Of the East. The
process has been slower, of course, in
the agricuI'u ral districts Of the West and
South
In view Of the small public speculative
holdings Of stocks, such 4 money condi-
ton inevitably makes for security spec
ulation. There are many corporations
whose asset value. as well as present and
prospective earnings, justifes higher
prices With the technical position favor
able, the response to a wave Of buying
may easily become pronounced. 1t is
Just such skyrocket performances as that
Of Gulf States Steel in the last week
that disclose speculative possibilities and
encourage pool activity, and attract
public following.
EXCHANGE INVESTIGATES
BUCKET SHOPS
There is still another feature that is
not so pleasant to mention, although
there is no reason why i should n5t
he treated with comparative irankness
It has been known for some time that
the Stock Exchange has been conducting
an inquiry into irregular brokerage
practices, and the activity of the So
called "bucket shops" The Exchange
undoubtedly is doing everything in its
power to rid the financial world Of these
parasites, and to place the business Of
buying and selling securities .on q solid
and honorable plane. In addition to the
legal steps that may be taken to this
end there no doubt has been strong
disposition to make life as uucomf0r-
able for the "bucket shops as possible
Wherever a short interest Of this ch3rac-
to obtain the bullish cooperation Of the
exchange element to drive these financial
buccaneers to cover. Undoubtedly this
goes far to explain the strong upward
movement in the steels last week, for no
one who has followed the progress of
recovery in this industry believes that
the improvement has been sufficiently
pronounced to justify any strong wave
Of optimism at this time. Other groups,
such MS the sugars and motors, offer
similar evidence Of these tactics.
Money has shown a tendency to hard
en- in the last week This is due in
large measure to the reluctance of in
terror banks to loan their money at
low call rate when they can employ it
more prohtably at home. Nevertheless
the gain Of 10 per cent in the Federal
reserve ratio to the new high basis of
7G reflects a continuation Of the liqui-
dation processes that have been operating
steadily for the last year and 4 half.
There Is therefore, no reason TO expect
anything but a gradual easing Of money.
subject to minor upturns.
INDUSTRIAL GROUP
OF INTEREST.
In the Industrial group. it would be
we'll to pay attention to these securities
that will be favorabIy affected by ap-
probation Of inventories. Many com
modities have been subject to drastic
liquidation. In such cases, recovery viii
react most fayorably upon the concerns
identified with such commOditiei. The
rise in raw wool, for example should
finds its reelection in a better position for
American wooden Sugar. barring some
piece Of tariff absurdity. probably has
seen bottom. Copper, leather and other
staples offer additional Illustrations The
so-caIled inventory stocks" had n hard
time of it last year. They may be among
the favorities Of fortune in 1922.
It cannot be denied that the financial
community is greatly disappointed over
to the trend of legislation at Washing
ton. The futile attempts to satisfy
group clamor and the disposition to re-
spOnd TO organized agitation do not speak
well for the future. No one expects the
position of the farmer to be improved
as a result of the amendment to the Fed
eral Reserve law placing a dirt farm
er on the board. The enactment Of the
soldiers bonus" bill, as foreshadOwed
by the announced program at Washing
ton, is regarded as neither patriotic nor
sound. The individual payments to cX-
service men cal not compensate them for
he depression that would be produced
by the adoption Of such 4 measure.
Washington evidently is trying to mud
die through" the period Of reconstruct
ton instead of acting with wisdom and
courag e.-Copyrigh -0222 by Public
OIL cor CopTuanv