The New York herald., 1922-01-20
FINANCIAL NEWS
AND COMMENT
Call Money Jumps Up to 6 Per
Cent.-Bonds Soften, While
Stocks Are Irregular.

An indication that interior banks had
not been influenced TO increase their
New York balances when the call money
rate became stable at ~. per cent. on
Tuesday and Wednesday was disclosed
yesterday in rise of the quotation to
per cent. Time funds also were a
shade firmer. banks being reluctant to
place short naturities under AZ per
cent The effect OF those changes wss
seen in a further softening of bond
prices and in a highly irregular trend
of prices for stocks. Speculative en-
deavor was not subdued, however, be-
cause while several rails and a number
of manufacturing company shares re-
ceded point or more and many lost
fractions there was a show OF strength
elsewhere. plainly the product Of pro.
fessional operations.
Such extraordinary power as was dis
closed in the rise of more than 16 points
in Gulf States Steel is worthy of a little
study by itself. At yesterdays top price
specalties and usually has a narrow
market. was 33s4 points above it's final
quotation OF last week. the genesis of
that extraordinary swing apparently lay
in letter sent out under the letterhead
OF law firm several days ago asking
for options on shares which the pros-
pective buyer sought to exercise II prices
were satisfactory. Spectators instantly
Interpreted Ibis as program for acquir-
ing control OF the property. but II such
Is the modern method OF obtaining the
dominant interest in corporation the
times have changed indeed since the
days of L. II. Hartman. The most
aggressive traders for the rise would
scoff at so clumsy an undertaking as
this purports to be were II not for re-
membrance that the first tremors of the
great war markets were felt In broad
and unexplained movements OF Mexican
Petroleum in 1915.
The rise OF the call loan rate failed
to persuade the Street that the money
market had entered a new phase In
which interest charges would be on
relatively high level for a lengthy period.
The weekly Reserve Bank statement
strengthened the impression that rates
would work lower shortly. The consoli-
dated report of the twelve Reserve
banks showed a new ratio OF cash 10
deposit and note Liabilities, this being
20 per cent. against 74.7 per cent. for
the week before. an increase brought
about by gain OF $40. 100000 in reserve
and a fall of So, 900 in outstanding
Reserve notes. The member banks made
further progress in cutting down loans.
the aggregate OF rediscounts being
S26.o0o,OOO less than the preceding week
showed. In the latter item was seen the
effect of the recent level OF acceptance
and collateral loan rates below redis- |
count charges, situation which caused |
the limitation OF member bank borrow
ings from Reserve institutions. In New
York there was a net decrease OF about |
se0,000,000 in redlscounts. and deposits
receded s15.600.00O, while Reserve note |
circulation declined s14.000.OO0. The |
Reserve ratio advanced slightly
The foreign exchanges were hardly |
changed at all at the end OF the session.
Cotton futures firmed up in the after
noon under dealings sufficiently light to
Indicate that speculation was on small
scale.