The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1921-10-23
PROPOSED STRIKE
AND MARKS BREAK
PROVIDE FEATURES
Neither Event Has Seri-
Gus Effect in General
Market Situation.
COMMODITIES OFF
Wheat and Cotton Sells OF
Sharply, Both Failing to
Make Recovery.
COMMODITIES OFF

NEW YORK, Oct. 22.-Two out
standing developments have over
Swallowed the financial markets
during the past week. In the
domestic situation the suddenly
threatened railroad strike has taken
the center of the stage, while the
onset of another sharp break in
p German marks has been the chief
feature in the foreign situation.
Both events carry far reaching pos
sibuities but neither has had any
pronounced effect on the markets.
Interesting enough the strike threat
found its greatest response in the
markets for farm products. Both
wheat and cotton sold off rather
sharply, and despite rallies, neither
commodity has made = full re-
covery. Thus the farmer, who al
ready feels the weight of high
freight rates and competition with
the high wages paid unskilled rail-
road labor, has suffered most from
the arbitrary and unjustifiable at
titude of the railroad unions.
Stock Market T. end.
In the stock market the rail is
sues sold off about a point on Mon
day and repeated the performance
on Friday, but in each instance the
recovery was generous and prices
were little changed on the week.
IndustriaIs whose earnings would
also be injured by an effective
strike showed an even smaller re-
Spouse and moved principally with
reference to their individual posi-
tions or with the exigencies of pro-
fessional operations. Taken as a
whole prices of industrials were
higher at the end of the week than
at the beginning.
Strike situation.
number of reasons can BE- ad-
vanced as to why the possibility of
a strike has had relatively so little
effect In the first place, the ORR
ginai strike announcement met with
a most incredulOus response. The
thing was so devoid of reasonable
lily that few believed 1t would acV
tualIy transpire. Besides, even II
the men do walk out, failure is
that a strike would be ineffective
and brief. and that the final result
would 90 far towards clearing the
atmosphere. The week has demon
strated moreover. that stocks are
in strong hands and that a stage
has been reached at which 1t is
easier to put stocks up than put
them down. More selling Is re-
quired on the decline than on the
5recoyery. Such acaion is, further
more, consistent with what we
know regarding our position in the
business cycle.
100" Decline in Marks.
The debacle in marks is interest
ing not only on account of its re-
ldtiOn to German finance but for its
repercussiOns in different parts of
the world. Individual German lack
of confidence in their own currency
has resulted in feverish buying of
the currencies Of adjacent countries,
with a corresponding increase in
the exchange value of these curren-
cies. Thus at the height Of the
recent wave of mark depreciation
Swiss francs rose above their par
value in terms of dollars which is
the first time anything of the kind
has happened to a European cur
rency since the post armistice slump
set in. At the same time the Swiss
market for short term money has
been flooded with German and Aus
TRAN owned balances. so that in
teTest rates on such funds have
fallen to exceedingly low levels.
Similar effects have been pro-
duced in Dutch finance. although in
this case the matter seems to have
been complicated by heavy Dutch
losses in mark speculation. Such
losses have resulted in bursts Of
selling Of oil shares for Dutch &C
count, both in London and New
York, and the transmission to Am
steEdam Of the funds realized has in
turn helped to bolster up the ex-
IchanEe value of guilders. The train
Of events set in motion by a break
In marks obviously is complicated.
How far indeed, the ramifications
OF such a break may be felt Is aptlv
illustrated by cables from India and
London. which attribute part of the
weeks reaction in Indian rupees
to the decline in marks. Germany
recently has been an active taker of
indian goods and a falling off in
her ability to purchase naturally
results in lower bids for Indian
commodities and so in a sympa-
thetic reaction in the value of
rupees
While the partial recovery in
marks indicHtes that a crisis Is
again avoided. II must he evident
that with constant printing OF fresh
marks their value cannot bit con-
tinue 20 decline, and that this KIND
of finance cannot go on In|eArItelv.
Isy now. however. the whole world
should be warned of the dancers
Involved In buying marks and the
conclusion Of the adventure should
be n-etty we'll discounted.
There were confused movements
in numerous stocks all throueh the
nast week. hut IN the end the most
important features consisted ~ the
nnpareut ARRANGEMENTS intended 70
force hurried covering Of shorts IN
stocks that had been most actively
traded IN fnr some time mast.
Mexican Petroleum.
The vigorous buying Of Mexican
petroleum late yesterday attracted
most attention. but no one seemed
10 have any information about the
suddenly developed strength except
that IL was the beginning of what
the street calls a squeeze Of shorts
Day after day for a long time past
Mexican petroleum has loaned fat
and surface indications in the loan
crown were that an immense short
interest had been created in the