The New York herald., 1921-06-04
FINANCIAL NEWS
AND COMMENT
Sugar Shares Lead in Stock
Reaction-Cuba Cane Pre-
ferred Slumps.

Abrupt reactions OF sugar, petroleum
stocks and several industrial specialties
showed again yesterday that the pro-
fessional trading element was confident
that the passing of dividends would
make purchasers timid. Sales for the
short account brought declines of to
more than 10 points. Cuba Cane Sugar
preferred falling no less than 12% points
Immediately after news came that the
quarterly return to shareholders had
been deferred. Buying power was light
III everything except rail issues, and cer-
tain OF these were carried down frac-
tional distances by the retreat OF the
industrials The market setting was
made all the more favorable for the
bears by the renewal rate Of ~ per
cent. for call loans, tho highest in sew
pressure on Libertys and other funded
securities than there was on Thursday.
the Liberty 3ias scoring quick re-
covery.
L
pany directors TO declare preferred
stock dividend was similar in its effect
on sentiment to corresponding event
in the case OF the Central Leather Com
pany a fortnight ago. The Street had
thought that the dividend would be con-
tinued, inasnuch as when that company
was formed in 1915 the sponsors had
produced statistics pointing out that
earnings should be sufficient to meet the
preferred stock requirements at what
was estimated then as an unusually low
price for raw sugar. But costs in that
year we're reckoned lower than they are
now and the idea OF demoralized mar
kets, such as now exist, was foreign to
the thoughts of corporation organizers
OF those days.
Several other dividends were passed
or put off. As soon as information In
respect to them reached the market the
bears began to hammer the stocks di-
rectly affected or others of their group,
which explained why American Sugar
was driven down to a new low point for
the year, despite the fact that the stock
sold ex dividend this week, and why
there was persistent output Of offer
ings of oil Issues and some Of the auto
mobile and rubber shares. The mar
ket was dominated so completely by SELL
ing for the fall Of prices rather than
by liquidation of long stock that the
question might be raised whether the
stage had rot been prepared this week
for rally. The reaction has been in
progress rather steadily for a month.
The detailed report on Reserve Bank
ratios of cash to note and deposit lia-
bilities showed that In the last week
the reserve institutions in Minneapolis
positions measurably, which indicated.
presumably, that farmers had been able
to get off enough Of their grain and
cotton stocks to make a dent in the loan
were concerned the IA cents a bushel
advance of cash wheat during the last
three weeks of May had meant some
thing worth while when they came to
sell into a hungry demand for export
May wheat in Chicago began to wabble
early IN the day, and after swinging
through range of 5 cents n bushel
closed 31a cents lower than it did on
Thursday.
The foreign exchange market seemed
for the account Of the German Gov
ernment might appear soon. and con-
sequently considerable local selling Of
sterling and francs was done after rates
had advanced slightly in early transac-
tions. The outlook Is for nervous
market so long as the reparation pay
ments are under way.