Evening star., 1921-07-01
OIL SITUATION HAS
PECULIAR FEATURES
Sharp Drop in Mexican Pc
tr0Ieum With Fair Rally.
Railroads Are Strong.
BY STUART II. WEST.

NE" YORK, July 1.-Today'S opera
tions on the stock exchange. restrict
ed as they. were by the prospect Of a
three-day suspension of business.
were confined principally to further
selling of the Mexican. and South
American oil shares on the one hand
and further buying Of the rails on
the other.
Between the conflicting movements
in these two groups the general list
stood most of the day irregular, but
still preserving tn" more confident
feeling which has come over the sit
uation during the past week.
Selling of the Mexican oils followed
reports that exports from Mexico
have d ready been cut down to d min
imum and will soon cease altogether.
This is The answer of American oil
co City who hav" refused to rescind
or modify the tax increase decree
which went into effect today.
The main point of interest in the
entire oil situation is now shifted to
the attitude of the Mexican govern
mrnt. confronted as they are with the
loss CT their most valuable source of
customs revenue.
New WnE Schedule.
The most important announcement
of the day was the Bethlehem Steels
new wage schedule. reducing the pay
of la borcrs at the Steelton plant an
other 10 per cent and office salaries
another 10 per cent. This when gen.
orally enforced will bring the wage
scale in the Bethlehem plants back to
where it stood in 1917
II Is as complete Il readjuStment of
wages as has yet occurred. and if it is
to be followed by the other steel COM
panies. as seems likely. it will mean
that the steel trade will have got its
labor costs down TO the lowest poSSi-
BILE limit. This wage reduction will
| take the sting off the impending sec
altogether proba BILE that consumers
OF steel will take tha,view. that. with
he readJuStment of wages completed
the new price schedules will mark
likewise the bottom of their decline.
General Asphalt.
There has been a lot of miscella-
neous speculative buying for the last
week or so in General Asphalt, follow
ing a rather widespread tip that the
stock was owersold and would have
a considerable rally. These new
buyers were of the type to run quick
iy o. the first sign of trouble. and
they Gid take 70 their heels once they
realized what II meant for the Cen
cral Asphalt Company to be shut off
new import tax goes through it will
compel all the South American COM
panies 10 curtail their development
work very largely.
Mexican Petroleum.
There were two developments in the
situation this morning to account for
the continued weakness in the Mexi-
can oils. One was the intimatoin of
an impending shutdown of Mexican
production altogether. to show the
authorities that in putting on the
extra export tax they were killing
the goose hat lay tn. golden egg
The other development was the re-
Board by the Standard Oil of New
Jersey that henceforth. it would sup
ply American oil exclusively in it's
contract fer lT.>2,O00 barrels and
not use the Mexican product at all.
The street continued to ask where
coming from il it is fact that
there are only 100000 free. shares
outstan andinE.
Ii M n>'de version of the decline
is right. that it is due to a bear
raid. then the financial district finds
1t hard to understand why the small
floating supply has no: been bought
up long ago by people in a position
TO know the real value of the shares.
and the bear crowd given an un-
merciful drubbing.
Money and Exchange.
The foreign exchanges, including
German marks. at length ceased go-
ing down and were inclined to rally
Operations in this quarter. however.
&ere small and unimportant. The
renewal on call loans was kept at s
per cent and will probably be he'd
there until the settlement money re-
turns to the market. which ordinarily
it does at the end of the first week
of July. \ per cent call money
market was d matter of slight in
tercst in the light of the federal re-
serve returns of the week. with their
astonishing percentage of 70.7 for
the New York district. as against
39.S year ago. The effect of the
recent concessions to mercantile bor-
rowers is shown in the increase of
commercial discount by the country
as a whole of s27.000.000, but this
can scarcely be indicative of fresh
expansion when accompanied. as it
was. by further reduction in note
issues and in loans secured by gov