The New York herald., 1921-09-07
FINANCIAL NEWS
AND COMMENT
Cotton's Strong Advance Stim-
ulates Other Commodity
and Stock Markets.

Against the background OF long
period OF sluggish markets during the
early summer the strong advance of
sensational and a vigorous forward
swing of stocks rounded out the picture
OF an altered market situation. Wheat
also had a part In the upturn OF
quotations. A rise of $40 a bale In
cotton futures. reaching the highest
price level since last November and
an advance of a point to more than
points in industrial stocks lent emphasis
to the belief held in some manufacture
ing and financial circles that business
had definitely broken away from forces
which had been working for reaction for
year and a half. 1t was noticeable,
however. that railroad shares had small
participation In the days activities and.
although generally firm. rail stock
quotations were not buoyant As the
speculative community had been coun'-
ing on improved earnings and enhanced
traffic prospects to lend favor to the
rails In the market place prior to the
discovery of stimulating factors Tor
industrial issues. the question whether
or not the buying was chiefly to cover
old short commitments might be raised.
1t Is reasonable to assume that the short
interest was large and rather comfort
ably established before last weeks rally
got under way More time will be
needed to determine the extent to which
purchases for the longer future have
counted in this months rise
Tx,
than the character of sentiment have
had application to the market for the
last fortnight. A probable crop of a
little more than 100000 bales, based
on the Governments report OF lasl
week. will merge with a carryover of
about an equal amount from last years
yield. A supply OF 100000 bales Of
American cotton at the beginning Of the
winter manufacturing period has been
considered in many normal years suffl-
GENTLY small to have a material effect
on the staples price movement That
Europe is beginning to wonder wna,
will happen to prices later on In case
that depleted stocks be faced by an
increased demand for cotton goods was
indicated by yesterdays rise. equal to
$13 bale under heavy buying In
Liverpool. Cotton future prices now
average s1a cents a pound more than
the years lowest points. AS 1t may be
estimated that the Southern grower
passed during the spring through much
of his difficulties growing out OF the
great fall of prices last autumn and
winter. the movement from around IL
cents to 20 cents a pound on the new
crop, produced at decidedly less expense
than the crop Of 1920 has an optimistic
meaning for the planters. Likewise,
prices when mean a profit have con-
structive application to the liquidation
Of bank loans entailed in the raising
and storing OF cotton and to the In
dustries which distribute their products
in the South.
The days rise Of stocks began with
the petroleum group, Mexican Petroleum
advancing briskly the result OF news
that American producers and the Mex
lean Government had come to an amlc-
able agreement in regard to taxes. But
the accumulation of week end and
holiday purcha sing orders was extensive
In all parts OF the Industrial list and
along under broad buying, several
issues lately inactive being drawn into
the wake Of the more prominent specu-
lative shares. There was natural re-
action near the close OF business.
but 1t failed to carry down stocks. the
advance of which had been persistent
The only ones TO recede substantially
Were those the rise of which In the
morning had reached upward to and
4 points. Call money was 5ls per cent.
for ALI borrowing.
When commodities advance It Is not
unusual to see foreign exchanges lose
ground, because increased values entail
the use OF more dollars than would have
been necessary for export purchases If
such advances had not occurred. Ster-
ling declined 2 cents to the pound to
3.70 and other European rates moved
Off