The New York herald., 1921-02-04
FINANCIAL NEWS
AND COMMENT
In Stock Market Reaction Ac-
tive Issues Are Weak and
Rails Unsettled.

A result Of the tight money situation
was yesterday greater prominence OF
stock market movements than in earlier
Guiding Atlantic. Gulf and West Indies.
Baldwin Locomotive. Mexican Petrol
cum, Northern Pacific, Reading. Pan
American Petroleum and Royal Dutch,
were weak throughout the day, reactions
extending from / point to moro than
points. In these changes to lower levels
a fall OF 31a points in Northern Pacific
attracted the most attention in specula-
tive circles by reason OF the marked
strength displayed on the day before
when the general trend was in the way
Of price easement. That some Of the
rails should have been unsettled was not
surprising. for. in addition to the In
huence OF S ard per cent. call money,
the market ha0 TO contend with several
rather poor earnings statements for
December. including those of the Burl-
ington and Southern Railway. There
was also a continuation of the dismal
picture OF railroad conditions presented
before the Railroad Labor Board by W.
W. Atterbury OF the Pennsylvania, who
was quoted in the news dispatches from
Chicago as saying that thirty-six rail-
road companies estimated that not even
their operating expenses were earned in
January. while twenty-eight others
failed to cover taxes and nxed charges.
The days presentation OF December
earnings would have been considered
not altogether unfavorable had it not
been for Mr.. Atterbury's reference to
results in January. While the Burling-
ton reported an operating deficit OF
81, 600. compared with profit of
sS96,000 in the same month of last year,
the Southern Pacific showed an increase
of s3S9,S00 in net over the total year
before. the Union Pacific's gain was
s364500, and the Erie's net income was
sS3S,70o. against $4,000 In December.
1919. Mr.. Atterburys survey Of the
January results. as estimated by the
companies, was made all the more
pointed by the inclusion Of such i'm
portant systems as the Great Northern.
Northern Pacific. Reading. Pennylvania,
Rock Island and Lehigh Valley in one
or the other of the groups he named.
The money situation was not greatly
changed from that OF the day before. ex-
cept that little bidding for commercial
paper was reported under per cent.
Considerable paper was moving on Mon
day and Tuesday at 7ai. and last week
a fair amount of prime bills was placed
at IA per cent The time money market
was marked by scanty offerings. with
IA per cent. asked for loans secured
by industrial securities. Bankers in po-
sition to know state that the retirement
of loans at reserve banks since the first
as can be expected for the present, for
there remains vast amount OF frozen
credit to be loosened up and this process
in the current state Of business must be
slow. In connection with the money and
investment markets the question may
be raised whether the enactment of
bill to permit partial payment to the
railroads OF the $3.50. 900. 900 due them
under the Government guarantee will
not necessitate a large issue OF Treasury
certificates for the purpose Thought Of
possible extra Government issue failed
to depress the Liberty bond list yester-
day. although the Victory notes were
easier than on Wednesday.
The foreign exchanges declined. but
the movement was by no means uni
form. some Of the European rates hold
ing up firmly. Sterling receded cent
to S.S4 and the franc moved off from
7.14 to 6.9s. Silver gained lSs cents in
New York. extending the recovery
which began on the day before. In con-
nection with the foreign markets, espe-
cally in reference 10 money and credit,
the Bank of England's statement for the
week showed renewal OF strain similar
to that seen here of late. Government
borrowing increased no less than f1T,-
400, 900. deposits expanded nearly f20.-
600. 900 aY there was a growth Of more
than f1,000.000 in circulation. AS the
total reserve declined 81. 900. 900, the
effect OF the changes was to cause a fall
Of the reserve ratio from l4.1S to 11.54
pef. cent