Evening star., 1921-06-06
.STER[|NCEXCHANGE
IN SEVERE DROP
Bears Busy Raiding Market
for Further Losses-Some
Recoveries Made.
BY 8. r. WEST.

WALL STREET. NEW YORK. June
S.-Another sensational break in the
foreign exchanges provided the lead
ing incident in todays financial mar
kets. The entire fall occurred directly
at the start of business. 1t carried
sterling down below $3.50. which
meant wiping out the whole gain of
the year and bringing rates back to
where they stood in December, before
the foreign trade had changed 50
radically in Europe's favor and before
the transfer to the United States of
some $500. 100000 gold
1t is not to be assumed that the
20 cent drop in sterling within less
than fortnight is. indicative of a
lasting turn for the worse. All 1t
signifies Is that temporarily the fac
tors which have been behind the re-
covery of the last six months have
been obscured by the operations in
cident to the German indemnity pay
ments. In order to set up the S33,Ooo,-
900 cash credit to New York federal
reserve banks, and in the course also
of preparing to meet the S200.O0O,oop
odd due in another three months.
Germany has had to convert it's cred
it's everywhere into dollars. This has
involved "A violent rise in American
currency abroad and Il corresponding
depreciation in other currencies.
Effect on Securities.
The renewed collapse in the ex-
changes unsettled the foreign govern
ment section of the bond market and
added somewhat to the sentimental
influences operating against the share
to struggle against continued tight
ness in money. The call loan re-
newal was fixed again at -. per
cent
Still further tests were afforded by
the cutting of refined sugar prices TO
hy fn he
reductions on the part of one or two
oil companies. Most of the sugar
stocks were driven down sharply as
trading began. The oil shares were
almost equally weak. with selling
heaviest in Pacific OIL. Texas Com
pany, Cosden and Sinclair.
Hitting Here and There.
The shipping stocks were sharply
attacked. and American Interna-
tional forced down to a new low for
the year. Kelly Springfield. Ameri-
can Agricultural Chemical General
Asphalt. Virginia Chemical common
and prcferred: Stewart Warner and
American Linseed were among others
that suffered.
Further Loss in Sugars.
Another break in sugar stocks fol-
lowed the announcement that the
leading refiners had again cut the
"
SIS cents pound. Word received
from Cuba that the cabinet there had
decided to continue the sales commits
sion had no stimulating effect. be-
cause il is still an open question in
the sugar trade whether or not this
regulative body is going to win out in
the end There were rumors of an
other important bank failure in Cuba
wtich might he announced at any
time and this contributed to the un-
settlement in the sugar group.
Punta Allegro furnished Il remark -
able exception by going up sharply.
while American Sugar. Cuba Cane and
some of the others were weakest. The
recovery in Punta Allegro WAS regard
ed. however. as nothing more than "A
technical movement. 1t was appar
emily 1t case where profits on the short
side were being covered in. taking the
advantage of the opportunity afforded
by the break in other members of the
sugar group
Declines Continue.
While ii is admitted that the short
interest has become decidedly large and
may be bit unweildly. in the event of
a few items of favorable news. there
is no question that the. fear of dividend
cutting and passing has taken the pub
lie entirely out Of the market and left
it chiefly to the professional scalper
who has grown fat on the big pickings
Of the unprecedented long continued
slump
From the low point covering by the
short interest brought rallies of point
and better.