The Washington times., 1925-02-28
WEEK TRADING
FEATURED BY
GAINS
Most of Speculative Markets
Make Further RecoVeries,
Following Holiday
By w. s. COUSINS,
InternatiOal News Service Financial
Editor.

1nternat1Oal News service ElnanclaI
Editor.
NEW YORK, Feb. 28.-The most
important developments this week
were in the money markets. High
call loan rates followed the sharp
decline in surplus reserve Of the
New York clearing house member
banks in the previous week and,
on Thursday, the directors Of the
Federal Reserve Bank Of New York
marked I'D the rediscount rate from
3 to 81 per cent, the former rate
having been in effect since last
August.
serves and a drop of Sc per cent
specializing on the probable raising
of the discount rate for at least
two months, there was q general
impression that, having delayed
action so long, the directors OF the
bank would wait until after the
turn of the month and possibly
until after March Is, when the first
installment Of income tax pay.
ments are due and Government
financing will have been completed.
But when confronted with the week
" statement, showing an increase
Of SIS, 581, 900 in rediscounted bills,
q decline Of SIS, 944,0 900 in gold re-
serves and a drop OF 5.6 per cent
in the reserve ratio" Of 69.6 per
cent against 1872 per cent in the
previous week, the directors OF the
bank felt impelled to make the
change without further delay.
However uncomfortable 1t may be
for bullish traders in the stock
market for the next week or so, the
higher bank rate is an evidence OF
the wider demand for industrial
and commercial funds all over the
country and Of the effect OF the
first phase Of the prosperity which
was long hailed from a distance
and appears to have finally arrived.
Idle bank funds and low discount
rates indicate, not activity and
prosperity, but stagnation in many
departments Of industry and,
therefore, the firmer trend OF
money rates is another factor, quite
as important as higher operations
of steel plants and mountaineering
car loadings, in proving the turning
of the tide in industrial prosperity.
Most Of the principal speculative
markets made further recovery this
week, the cotton and stock market
quietly but steadily, the grain mar
kets most boisterously. Wheat
prices at Chicago and Winnipeg
Jumped from to 8 cents a bushei
on Thursday, and May wheat re-
turned to 1876 in the Chicago mar
ket.
Active trading in the railroad
stocks featured the New York
stock market on the resumption or
business after Mondays holiday,
but the market broadened consid-
erably the week advanced and bull
ish activities extended to the motor
shares, the equipments, the sugar
stocks, the shipping and indie
pendent steel shares. Compilations
of most of the statistical agencies
show a new high average for the
year in high railroad and indus
trial stocks as well as high price
record in fifty or more individual
stocks. The pools were aggressive
In a number Of stocks they are
sponsoring, as a consequence of
which the bears have had rough
shedding in a number Of the market
leaders.
Buying of the railroad shares
was based on the prospect of the
completion of the proposed mergers
In strategic sections Of the country
a. well as on the excellent January
earnings statements published this
week. Prospects in the motor,
shipping, sugar and other indus
tries were also reported as being
much brighter.
Some liquidation was caused by
the advance in the re-discount rate,
and prices showed tendency to sag
at the opening OF the market on
Friday. The market recovered in
the first hour, however, and the
rally in stock prices was resumed
In as vigorous a manner as be-
f0ro the advance