The New York herald., 1921-06-17
FINANCIAL NEWS
AND COMMENT
Industrial Issues Hard Pressed
in Market. & N. to Pay
Stock Dividend.

The stock market session yesterday :
consisted of one hard drive after another
against a dozen industrial issues. The
effort in Mexican Petroleum on wednes-
day impaired confidence to the specu-
lators committed to the fall OF values.
and they met no important resistance
yesterday among the petroleum. tobacco
and leather shares. 1t was in keeping
with events of preceding days Of the
week that Mexican Petroleum should
lead the decline of the active group with
drop of more than 6 points. but some
Of the tobaccos slumped points to more
than 3 points, and one usually inactive
stock, American Tobacco, class b. was
beaten down further than that maximum.
The levelling of all classes OF redis-
counts at the Reserve Bank to per cent.
had no influence in arousing purchases
Of stocks and was ignored by the short
sellers, despite the forecast contained in
lowering Of the commercial bill rcdis-
count quotation that money was headed
for an easier position. The stock market
in the last few days has reached a stag
where decidedly constructive develop
ment would tend to check attack. but
where occurrences that have been ex-
pected are of no avail. A bear market
carries itself forward by it's own impetus
after weeks of persistent declines, Just as
the extravagant upturn of 1919 continued
headlong until fundamental conditions Of
credit and business caused it to halt.
The day was practically bare OF news
which could affect the stock market
either way. Declaration on Wednesday
of the usual Northern Pacific dividend
seemed to help sentiment toward the
railroad shares, but many OF them
worked lower before the close. An in
teresting railroad item was the decision
by the Louisville and Nashville to cap
italize part of its ss0,0o0,000 surplus
through stock dividend. That step was
significant through the forecast it made
that the company was preparing for new
financing, a programme which entailed a
fresh alignment of stock and funded
securities.
Bank clearings of more than $1,000
100000 reflected the unusually large
transactions hinged on income tax and
Treasury note payments. but there was
no change of the call money situation.
On the New York Stock Exchange the
rate was 51s per cent. and outside
plenty of funds were available at per
cent. and lower. The lowering of the
rediscount charge did not have an i'm
mediate effect on commercial paper
quotations in the open market and they
remained at 61a to 6% per cent. for the
best names, but changes had not been
expected at once. The liquidation of
mercantile loans is proceeding too
slowly for banks to become active bid
ders for new paper. although the output
of the latter is of moderate proportions
and gives no sign OF growing extensive
ly in the near future.
The Bank of Englands rate of min
imum discount was continued at e1s
per cent. showing presumably that any
relationship which may exist between
the loan charges of the British institu-
tion and the Reserve Bank in New
York in these times of close intercourse
IN international banking has been at-
fected overseas by the prolonged coal
strike. Tt Is impossible as yet to see
the way in. which this tieup OF fuel sup
ply is having influence on the foreign
exchange market. although il stands TO
reason that the enforced contraction
of British industry sooner or later viii
affect commerce. Sterling moved yes
terday in highly erratic fashion, first
swinging upward nearly cents from
3.777s and then dropping back to
3.76ss for net decline of more than a
half cent to the pound. The Continental
exchanges followed the London quotation
in the reaction, although selling pres
sure was not substantial in any field
Wheat futures gave ground. evidently
feeling the effect Of good harvesting re-
turns. The July contract declined az
cents. Fresh liquidation carried cotton
prices down 40 to IS points.