The New York herald., 1921-10-23
FINANCIAL NEWS
AND COMMENT
Early Rapid Gains Of Stocks Is
Checked as New Pressure
Is Put on Rails.

A heavy flow OF short covering orders
in Industrial stocks entered the market
in the first hour OF it's business of yes
terday. carrying prices upward with con-
siderable velocity. Dealings were very
much one sided during that period, but
rs soon as the rush of buying by the
! short interest slowed down new pressure.
| aimed particularly at the railroad group,
came in. The latter development was
fully explained by the situation which
the carriers are facing. The mandatory
repression of the strike by the United
tant as far as the movement of traffic
is concerned, and there was no doubt
that manufacturing company shares re-
fiected it, but the carriers still have an
uncertain outlook In regard to their
wage schedules and freight rates. The
public demand for freight and passenger
rate reductions is growing with such
impetus that the market was apprehen-
sive yesterday, as on Friday, OF action
by the Interstate Commerce Commission
before the roads should be assured that
wages can be lowered to a greater extent
than the result obtained In the cut of
July. The lowering of rates on grain In
the West looks like the initial cut Of
series.
Several industrial shares. including
American Locomotive, Great Northern
Ore. Haskell & Barker, Houston Oil and
Pullman Company, retained gains of a
point to 5 points at the close. but the
advances OF others were mainly reduced
to fractions. The leading rails, Great
Northern preferred. Northern Pacific and
Southern Pacific among others, were
weak at the end Of the session.
The days outstanding industrial event
was the reduction Of 81 a ton. or prac-
tically Is per cent, in the price Of
standard rails by the United States
Steel Corporation. Rails have usually
been the most stubborn product to
change in a period Of price readjust-
rients, and therefore the cut might be
thought unsettling at the time when
several light materials have become
lodged at level higher than prevailed
prior to August. But 1t is likely that
the corporation had in mind when the
reduction was ordered the value which
the alteration would have for the car
riers. because at their old quotation
buying of rails had shrunk to month
~ total far under a normal volume.
The New York Clearing House bank
returns. like the report Of the Federal
Reserve system on Thursday. reflected
the after effects of the mid-montk Gov
oinment operations. Loans declined
sT3.000,000. AS the reserve carried with
the Reserve institution declined $S1.So0,-
600 at the same time that demand de-
posits expanded nearly s77.O0O.0Oo the
combined excess reserve Of the banks
was wiped out and deficit Of $685.
900 incurred. A similar situation has
been brought about in eight weeks of
this year and no longer carries the Sig
nificance It did prior to the formation
OF the Reserve system. The reserve can
be restored at the will Of the member
banks through rediscounts of paper at
the central bank.
Wheat prices lost some Of the advan-
tage gained on the Friday before. Cot
ton was steady. There were only slight
changes of foreign exchange quotations
as compared with those of Friday.