The New York herald., 1921-07-06
FINANCIAL NEWS
AND COMMENT
Mexican Petroleum Declines in
Dull Stock Market, While
Bonds Advance.

Trading in stocks was so dull yester-
day--it was the dullest session of the
year TO date-that il was impossible to
attach any significance to price move
ments except in Mexican Petroleum and
shares allied to it, The reaction Of
Mexican Petroleum, in excess of eight
points, indicated that spectators were
impressed by reports that American oil
companies with properties in the south
ern republic were preparing to discon-
tinue exports of oil. The actual news
so far received of the situation growing
out of the latest export tax impose by
the Obregon Government shows that for
eign producers are inclined to combat
the ruling. But the complete signifi-
cance of information that American war
vessels had gone to Tampico was not
known during business hours yesterday
and. therefore. all things considered,
short selling consisted mainly of shots
in the dark The market seemingly has
ceased TO consider potential values of
American holdings in Mexico, fact
which would put the short interest in
tight position in case the tax should
be made void
The general price tendency of stocks
was downward, declines of a point to
two points being recorded by American
Sugar. Bethlehem Steel class B. Bald
win Locomotive, Great Northern pre-
ferred, Lackawanna Steel and few
others. The steel issues undoubtedly
were affected by the Bethlehem COM
pany's announcement of 50 a ton cut
in prices of certain products. although
such decision was forecast last week.
The point of chief interest in connection
with the reduction was that high rail-
road freight charges were mentioned as
leading factor in costs. The inference
is that unless transportation charges
come down IL will be difficult TO make
further concessions in prices. which
the course of freight rates in case ship
pers insist that they be lowered
While stocks were drifting lower III
sluggish fashion the bond market was
making progress forward in satisfactory
fashion Both Government and corpora
ton bonds were in demand, the turnover
of Liberty and Victory issues being
large enough to suggest that the July
investment buying was of really sub
stantial proportions. Railroad bonds
were firm all the way along. AS the
money market is showing continued
signs of ease the bond market appears
to be in a strong position. The slacken-
ing of new offerings is causing investors
10 look about among the old line rails
and in the Government department, do
nestle and foreign. for good paper. Gail
money yesterday eased from to ~
per cent. on the New York Stock Ex-
change, funds being available outside at
s per cent. The real test of money. how
ever. will come in commercial paper and
time loan rates and in them the ten
6ency toward relaxation so far has been
decidedly slow. The speed with which
the crops are sold and with which such
liquidation enables the farmer to buy
goods will have much to do with the
melting of frozen credits and lower in
terest rates during the remainder of the
summer
As the Liverpool cotton market strode
forward while the markets were closed
here on Monday. cotton quotations ad-
vanced yesterday under a sizable de-
mand from exporters and domestic spin
ners Not all of the 20 to 80 point ad-
vance OF the morning was retained. how
ever. at the close. as speculation for the
fall was attracted by the early bulge.
Wheat futures dropped ~ to cents
a bushel in Chicago. the continued re-
action being not at all surprising in
view of early harvesting and generally
good weather conditions in the wheat
belt
The foreign exchanges were dull. A
fractional decline of sterling carried the
rate to 3.72h.