Evening star., 1921-06-09
MEXICAN OILS IN
A SEVERE DECLINE
Report Of Heavy Export Tax
Brings Selling Movement.
Steels Weak.
By STUART p. WEST.

NEW YORK, June e.-Tfe most i'm
portaRt incident in the news of the
day, - bearing upon tho stock mar
Ret was the unexpected announce
nent overnight that the Mexican gov
ernment had raised the tax on oil az
ports Is per cent. While it is easily
possible that speculative Wall street
overra.ed the importance Of this an
it was not surprising
sufficiently sensitive, it should have
had. for the time being, at least, 4
very disturbing effect.
A break almost overnight Of 3 to 8
points in the Mexican oils. the re
steeis and relative Issues and the
acute weakness in stocks Of fertilizer
companies, provided a purely formi-
dAbie combination fur fl1e markAt to
staad up against
There was ono favorable develop
ment and that was the further easing
this week the rate on standing loans
was reduced: 1t stood at 6h per cent
as against ~ on Monday. q
The fact that quotations should
have been lowered on the eve Of the
mid month requirements for govern
stal1ment Of federal taxeA indicated
that there was nothing at all serious
about the recent restriction Of the
local money supply. This, It now
appears. was largely due to the tenn
porary & tis.rp Of funds in soms e the
and the release OF these sums has
promptly relieved such tension as
there Wa.
Break N Exchange.
,,Another violent downward plunge
in the foreign exchanges contributed
to the unsettlement Of the day, al
though it is. Of course, realized that
the decline Is no reflection upon
almost wholly due to the transfer
OF funds in connection with the Ger
man indemnity payments. Were the
allied governments disposed to fear
the consequences Of this fall In rates
upon their home trade and finance,
they have used the means OF correc-
ton In their own hands.
All that would be necessary would
be to stop the purchase Of dollar ex-
change and amend their policy SO as
to receive part payment In foreign
cufrencies. At it's extreme low-un-
and back to the low Of the winter.
Action In OIL Shares.
.Me0CAn 10IlOlcuIu anu .luS oil.
American Petroleum stocks broke
from 1 to 8 points before encounter
ing any resistance at all. This decline
occurred within q half-hour after the
start of business, and was q measure
of the surprise occasioned by the
overnight announcement OF the Is per
cent increase in the tax hxed by the
Mexican government on oil exports.
There had been Z lot OF fresh 6pecula-
tive buying In Mexican Petroleum
yesterday and the cay before, and
some Of It came from . crowd which
had been playing the bear side AND
picked out MAGtcAn Petroleum aS the
logical thing to boH for q rally.
The stock thus purchased vas has
ttly pitched over this morning, and
there was the usual poor ntAfket In
the pan-Americans when . ruSh Of
setting came into them. The street
reasoned that il the Mexican compa-
nies are forced to pay this heavy ex-
ira tax, they will be at q dieadvan-
tage with oil concerns elsewhere.
The news was bulfish for the Amer
ican oils, and this was reflected in &C.
tive buying Of Pacific Oil and bet
ter market for most Of the other
members Of the group. The regular
dividend was declared on Cal6O4nta
Petroleum preferred, bat whle tn
board Is said to favor the begindne
of dividends on the common. It u
hardly thought likely that anything
viii 6e done At tho m6ttidg scheduled
Tor tomorrow.
lA>~. AkA A&ahs &S> -s~> -ya.S