The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-06-02
FINANCIAL NEWS
AND COMMENT
Stocks Recover in Afternoon,
With Call Money at z 1-2-
Exchanges Advance.

The stock market hardly knew yester-
day morning what to do about the Rail-
road Labor Boards decision on rail
wages The average reduction of 1s per
cent. was less than the maximum sug-
gested in preliminary estimates and only
far enough above the minimum reported
from Chicago a few days ago to indi-
cate an apparent straddle between the
two extremes of 10 and Is per cent.
Stocks receded for a time, but later the
constructive aspects OF the mandate
were appreciated by traders and early
declines were gradually eliminated. Out
side of few issues affected by factors
peculiar to themselves, including Cru
chile Steel. Pierce Arrow preferred and
several sugar and tobacco shares, the
closing showed net gains. Northern Pa.
cinc, Mexican Petroleum. Studebaker
Royal Dutch and others left Off more
than a point higher than the day be-
fore. Business was slightly more &C
tive than 1t was on Tuesday and the
afternoon recovery proceeded In the face
of a call loan rate OF III per cent
Liberty S1a per cent. bonds reached a
new low level under 81 and the bond
market as a whole was rather unsteady
at times. evidently rejoicing the nrn
tone Of money rates.
The full effect of rail wage reductions
cannot be ascertained yet. The est.
mate that s4oo.ooo.0oo viii be Topped
of wage costs Of the roads Is based or
a roster Of workers as large as that o,
last summer when Fl per cent. increase
carried the payroll $500 900, 900 upward
The number of employees is probably
20 per cent. less just now. Traffic, how
evsr, is expected to improve In a few
weeks when grain begins to move tc
storage points and with growth of gross
income 1t stands to reason that the les
SEEMING of expense for labor hire will
show forth in net revenue. AS it stands
by itself, the Railroad Labor Boards
prescribed reduction Is less than rail
road employers had hoped for, but al
an earnest of official attention to q
troublesome phase Of operating costs the
realize that the liquidation of labor
should be directed by consideration OF
the trend OF living costs. The roads are
economizing in many directions and tbs
combination Of all efforts to lower ex.
penses and prospects of improved freight
movements are believed in financial
quarters to be Frightening the rail out.
look. A matter of growing Importance
Is the movement in Washington to reduce
freight charges on commodities, a fac
tor the influence Of which upon rail-
road income cannot be determined yet
A concession In freight rates would not
necessarily nullify or impair the force
of wage cuts. provided that 1t helped &c
stimulate traffic
The foreign exchange market and the
market for wheat futures were decidedly
interesting. Relieved OF the pressure
entailed in last weeks transfer of Ger
man funds to this side from Europe
sterling and franc rates advanced vigor-
ously, the former rising about 2 cents
to the pound and the latter IL points.
Dutch, Swiss and Belgian exchange also
swung forward and the German rate was
fairly steady. The deposit OF 5000. ooO
in the local Reserve Bank for the &C.
count of the Preparations Commission by
no means removes the possibility of ad-
ditional accumulation Of funds here In
the near future, with fresh pressure OF
the exchanges, but the market action
showed that the factors working for
higher exchanges, which were shunted
aside by the reparations transaction,
were again at work.
A rise of more than s cents bushel
In July wheat indicated that short cover
ing Of urgent character had not ceased
with the completion of May contracts
But a spread OF more than 40 cents be-
tween cash wheat and futures suggests
that buying is urgent and supplies mod
crate.