Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-03-23
Averages Pushed Higher Dur
ing Week, Despite Meager
Trade News.
DISCOUNTING OF SPRING
TRADE REVIVAL is SEEN
Action of Market Believed Due to
Expectation of Better
Business.
BY CLAUDE A. JAEGER,
Associated Press Financial Writar.

NEW YORK, March 22-Speculative
enthusiasm was whipped up to a new
pitch of intensity for the post-Autumn
crash period by a deluge of funds into
the money market during the past
week. Bears continued to seek out iso-
lated weak spots with considerable sue
cess, but the aggregate price level was
lifted to new high ground for the re-
covery, and the volume of trading ex-
banded markedly. Sales on Friday ex-
ceeded 100000 shares, the largest
days business since December.
Business and trade reports continued
rather cherries, and the stock market
appeared to be discounting expectations
rather than accomplished facts. Never
thelesS, these expectations grew steadily
more confident. Money rates dropped to
the lowest levels in years, and Gov.
Young of the Federal Reserve Board, in
an address in Washington, left no doubt
that the reserve system has adopted
positive policy of cheap money to revive
business. While easy credit conditions
cannot be expected to cause an imme-
diate upSwing In business, they are re-
garded as greatly enhancing the long
range prospects.
Course Of Money Rates.
The New York Federal Reserve Bank
made no further reduction in its redis-
count rate of S1a per cent, but the
Bank Of England cut its rate from to
81. Call money renewed on the Stock
Exchange as low as per cent on
Thursday, the lowest in nearly six years.
On Tuesday and Wednesday it was
available in the outside market as low
as / II per cent, the lowest since 1917.
In March of last year, loans ranged
from 6 to 20 per cent. At the end Of
thu week there was a sudden stiffening,
carrying call money to Az per cent,
but this appeared to be due to tenn
porary factors.
Both the per cent rate of Thurs
day and the Az per cent rate of Friday
appeared to be temporary exaggera-
tons. The extraordinary drop in rates
was accentuated by the credit released
by the treasury overdraft in connec-
ton with its quarterly financing. The
overdraft was eliminated on Friday,
and banks were unwilling to place
funds for employment over the week
end at the prevailing low rates, causing
a momentary scarcity of funds. Com
paratively reasonable money Is expected
next week.
The weekly brokerage loan figures
disclosed another sharp advance,
tinued gain in the loan total during
the last few weeks is regarded as re-
flecting considerable pool distribution,
but there is much disagreement among
observers as to whether 1t indicates any
serious weakening of the markets posi-
ton. 1t is argued that powerful oper-
ators, finding carrying charges down
where dividends will pay them, have
been accommodating long lines of stock
on margin, and are prepared to hold
them as long as call money remains
cheap.
Shifting Of Loans Seen.
Also, with call money much cheaper
han bank loans against security col
lateral, there has undoubtedly been a
shifting of Dank loans into brokers
loans.
Through Friday the price index of 80
leading shares recorded an extreme
gain for the week of ~ points, which
carried 1t to a new high level since late
October. This gain was reduced 2
points by heavy week end profit taking
today, however.