The New York herald., 1921-09-09
FINANCIAL NEWS
AND COMMENT
Stocks Rccede Slightly as Cot
ton Breaks Violcntly-Mark
Exchange Down.

W anotHef NfOient Dfeah OF COTTON
prices. a fall OF German exchange to
practically the lowest level ever re-
corded, one of the years most active
bond market sessions. sic. 6.0o0.o0o being
turned over on the New York Stock
Exchange, and n fairly extensive re-
action in stocks. No mystery sur
rounded movements OF any market In
the case OF cotton It had been evident
on Wednesday that. the first disturbing
impression OF the last Government re-
port being allayed in Liverpool and In
the American market centres. great
| amount OF contracts were being pressed
for sale. The fact that the prescribed
limit OF single days price movement
had been reached just before the close
offerings would be hurried In yester-
| day morning. This was what happened.
Liverpool prices had receded fully 3
cents a pound before business began
here. with the result that initial quota
tions on the local Cotton Exchange were
$3.50 to $3.50 bale lower than they
were on Wednesday. and final prices
saw fully SIS bale Topped off maxi
mum quotations of the week.
The tremendous fluctuations of cotton
in the last ten days may be surveyed
from one angle when viewed from the
speculative point of view. and from
another angle when real economic con-
siderations are examined. Undoubtedly,
the entrance OF spectators into the
market ON large scale in this country
and abroad was the dominant force be-
hind the advance. and the scramble to
take quick profits directed the sharp
reaction. But underneath the extraor-
dinary market movements lies the
significant fact that the average Of
yesterday afternoons prices was still
more than 6 cents a pound more than
the lowest point OF this year, which, by
counting heavily in the well being Of
producers.
Speculation in stocks early in the day
came under the influence of the trend Of
cotton prices. While Baldwin Locomo-
tive and three or four specialties We're
able to advance and retain much OF their
gains, the rank and file OF Industrial and
railroad shares oased of. The move
nlent was not rapid at any time and It
did not appear that there was much
pressure, most declines being fractional
In extent. The market acted as though
sales came mostly from traders who
desired to take their profits, without,
however, attempting to drive prices
lower by new short selling
Money rates were distinctly favora bic
to undertakings in securities and ap-
peared to be reflected in the bond mar
ket, in which an unusually large turn
over was accomplished by rising scale
of prices. Call money was lent In the
New York Stock Exchange at 5la sHnd
per cent. but outside funds were OBJ
tainable at per cent. Short dated time
loans were lower than they were on
Wednesday. The investment market
will have before 1t to-day an offering OF
5000, ,00O, 900 of United States Treasury
notes OF six months to three years
maturlties at rates quarter of / per
cont. lower than the last issue COM
manded.
The decline. which carried the German
exchange rate to a level where the mari:
was worth little more than cent-it
was quoted at cent in some quarters
resulted from the great strain on Ger
man finances from reparat.on payments
and from the fact that the German peo-
pie demonstrated more than before a
shaken faith in the immediate financial
outlook. The rush TO convert currency
into securities in Berlin has been SO
great that the Bourse has been closed.
cabled messages stating that 1t would
not be reopencd for week. The low
rate OF tnc mark suggests that much
will be heard later of plans to have
reparation instalments met in goods and
services. The mark was quoted at
1.21 n cents on August y, Detore tne
effort TO meet the reparations payment
of August 81 became intense. Sterling
yesterday advanced fraction to 3.72lt
The weekly Federal Reserve report
suggested that crop moving demands
were being reflected for practically the
first time this season, and that the re-
quirements of general business for cur
rency and credit were increasing The
Reserve system, as a whole, showed an
expansion of s26, ,15e 900 In rediscounts
| Goans), an increase OF s36,097.000 in
outstanding Reserve notes and a growth
OF S27.314.000 In deposits. Gold reserve
Increased s15.317.o0o, chiefly through
new importations, bet at New York
there was a recession OF more than sis.-
400. 900 In that reserve receipts of metal
not being sufficient to offset an outflow
Of S31.1S7. 900 through the gold settle
ment fund. The SYSTEMS reserve ratio
declined from 6s.S to 662 per cent for
=