Evening star., 1921-07-05
STOCKS ARE DULL;
BONDS IN DEMAND
BY STUART p. WEST.

NEW YORK, July 5.-The most in
teresting and at the same time most
important developments in the sit
uation today took place in the bond
market. In contrast to the dullness
and general apathy which again
characterized trading in stocks. buy
ing prices forward, especially in the
railway list. The exact significance
of this movement cannot be deter
mined until opportunity has been CIV
en- to test how much 1t depends upon
the midyear ''reinveStment demand"
In January under similar impetus
the rise In bonds was rapid and ex-
tensive for a fortnight or so. but
then it petered out, and a good part
Of the gains was subsequently lost.
The difference. however. between the
situation now and six months ago is
that the present accumulation Of un-
employed funds due to the trade de-
preston is far greater. consequently
the drift of money rates downward
is much surer and much more likely
to be lasting.
No repetition of the sudden and un-
expected money question of the first
two weeks of February is conceivable
now. Moreover. syndicates bringing
out new securities have greatly cur
tailed their activities, and so the two
chief causes for the check upon the
January investment boom are not in
prospect now.
OIL Shares Erratic.
Mexican Petroleum made another Of
it's now familiar new low records"
There was nothing new in the situa-
tion. the market for the stock was
merely adjusting itself still further
to the complete shutdown of Mexican
oil operations in general. the result of
the prohibitive export tax. Although
Royal Dutch has large Mexican inter-
1t loses by the developments in the
situation. because the competition Of
the big Mexican companies will be
eliminated In the foreign markets. un-
til the authorities at Mexico City are
made to see that they are killing the
golden goose.
Apparently the Jump in Royal Dutch
stock this morning was London's and
Amsterdam's belated recognition Of this.
American oils were again noticeably
steady. while Mexican Petroleum was
breaking. this, too. because Of the ex-
clusion of Mexican competition.
Sugars Drop Again.
American Sugar was driven down
again on talk Of unfavorable action at
somewhat premature talk. because the
meeting Is not scheduled until the first
week in August. The main thing in
American Sugars situation which is still
in doubt is the litigation between the
company and some of its big customers,
who, the former claim, laid down on their
high-priced contracts when the bottom
fell out of the sugar market a year ago.
Selling of Cuba Cane Sugar issues ac-
companied the continued slump in the Z
per cent convertible bonds. which
reached new low prices.
Steel Stocks.
While the street knew well enough
last week that another series of price
cuts was coming in the steel trade.
the announcement of the 81 a ton
reduction by the Bethlehem company
proved not to have been fully dis
counted. Much interest was taken in
the Bethlehem presidents analysis of
the new price schedule. showing that
the mill owners margin of profit was
considerably smaller than the average
In the years preceding the war. In
other words. a good deal more than
the entire increase in present prices
over those Of the pre-war period is
absorbed by the increased cost of
Transportation, labor and materials.
1t is expected that the other inde-
pendent companies will follow Beth
lehem's lead and that the United
States Steel Corporation will take
similar action before the middle of
the month.