The New York herald., 1921-10-22
FINANCIAL NEWS
AND COMMENT
Labor Boards Warning to
Unions Aids Stock Market,
but Exchanges React.

The stock market found support yes
terday in the vigorous action of the
United States Railroad Labor Board for
the growing belief that there would be
no railroad strike. and consequently an
irregular price movement in the fore
part of the session was converted into
strength in the afternoon. That railroad
shares did not advance with a power
equal to that of many industrials was
fully explained by the fact that the
warning issued by the board to the
unions failed to solve a grave problem
which the carriers have before them.
The board can deal with wages and
working conditions. 1t has no power
over freight rates. Followers of railroad
stocks see that the pressure for reduced
rates is gaining strength. and it is not
clear yet that there will be complete
offset in wage cuts to expected action
by the Interstate Commerce Commission
in ordering freight rates to a lower
basis. A RECESSION OF the strike order.
acceptance by railroad workers of the
II per cent. average wage reduction
effected on July l and cut of freight
carrying charges-those developments
and nothing more would leave the roads
exactly where they were before the
present disturbance arose.
The thought that the board might
stand opposed to further wage reduc-
tions at this time did not, however. have
any adverse application to speculation in
oil and manufacturing company issues.
Mexican Petroleum completed the rout
of the bears which began on Thursday
by rising more than points. and
numerous other petroleum stocks. rail-
road equipment and automobile shares
rose point to more than 2 points. The
rather unexpected advance Of call money
from 4 per cent. to ) per cent. In the
afternoon failed to check the advance.
The board evidently has full assurance
that the Administration will uphold to
the full extent of the law any rulings
that it may make as the result of the
conference called for next Wednesday.
This holds good equally for workers and
employers. As a test of the true func-
tions of one product of the Transporta-
tion act Of 1920. the conference prom
ises to have much value. over and above
the relation It will have to the threat
ened railroad tie up.
Grain as well as stocks felt the in
fluence of the clarifying transportation
situation, for there was a somewhat
cbrupt shrinkage of offerings and wheat
futures advanced s cents bushel The
recovery extended to the Canadian mar
kets. in which there had been sharp de-
clines earlier in the week. Cotton. how
ever. was carried down 81 to 35 points
ty the force Of report by the National
Ginners Association which made the
amount prepared for market to date
100000 bales and noted that this was
estimated to be "A per cent. of the crop.
Should those figures be borne out by
official reports later they would indicate
a crop in excess of 100000 bales. con-
trasted with the Governments estimate
of 6.537.000 bales in its survey Of crop
conditions on September %.
The foreign exchanges reversed their
movement Of Thursday. sterling reacting
full 2 cents to the pound and German
marks receding from .6S cent to less than
60 cent. The swings in that market are
not explainable by day to day events
which appear on the surface to apply to
them. Business is filled with speculative
cross currents to an extent which SUBJ
merges the effect Of such financial and
economic influences as might be trace
able in rates during normal period