The Washington herald., 1921-08-27

Such an increase might be traced to
two sources. II. in the first place,
the banks to which New York has
extended assistance should pay OF,
part Of their borrowings. New York
would be given q corresponding
credit In the settlement fund. But
the latest statement shows that this
bank actually increased its loans 70
other banks by S5,e00, 900. The other
explanation would Be a transfer of
funds to banks in the New York dis
trtct for some reason or other. A
study OF the New York banks state
ment on the occasion Of the last
previous easing of call mnoey-
when rates declined TO ~ per cent
on July Is and 20 and August L.
shows an increase OF $4,000. Oee in
the gold settlement fund in the face
Of 100000 enlargement Of this
banks advances TO other districts.
The topic of interest i'm Wall
Street today was the Mexican Pc
troleum incident and the probable
outcome Of the investigation which
the stock exchange committee on
business conduct started early YES
terday afternoon. The responsible
element in Wall Street sees the
harmful effect which an incident
or this kind might have on public
sentiment and will not be content
until proper example is made OF
all parties TO the most brazen de-
ception that has been practiced in
the market community in manv
years. There will be an tnyestiRs-
tloh OF the reports that some up-
towH traders were interested in a
rumor on Wednesday to the effect
that the dividend would be deferred
The whole incident is likely 10 leave
bad taste in the mouth of the
public unless the guilty parties arc
exposed.
Weakness again developed In
United States Rubber both the COM
mon and preferred stocks declining
to new low levels before noon
Rubber started the session with A
half point advance and then added
Slightly to this gain along with the
rest OF the list but reacted in the
second hour of trading to az.
This price represents a loss Of SO
points from the high Of the year.
and decline Of l0$ points from
Rubber's highest selling point
reached in 1920. The company has
been hoeing a hard row ever since
the collapse Of the post armistice
boom with its attendant deflation in
the prices of both raws and finished
products. and although the books
showed a surplus balance of So
S7s.SO6 at the finish of 1920. the
current years business has been SO
poor that the directors passed the
regular quarterly DIVIDEND of 2 per
cent. due July 81. The statement
OF earnings for the first six months
OF this year will be made public
next week, and il S expected that
the report will show a deficit Of
approximately $1,000 900 after AL
lowance for dividends declared in
the first quarter 4 furry in Rub
Der occurred n week ago. following
selling in connection with the set
Element of the Colt estate.
Starting with fractional over
night gains. the stock market ad-
Vanced sharply during the best part
OF the first hour. The recoveries
ranged from to 4 points in the
more active stocks. Behind the
kind OF buying which caused the
advance lies the principal reason
why big bear operate RS do not like
to have too big a following among
small traders. The most plausible
explanation for the rapidity Of the
early advance was that the small
fry working on the short side had
placed stop-loss orders just above
yesterdays closing level with the
result that when any individual
stock started to advance this morn
ing II ran into supporting orders,
which helped the movement along.
The big shorts felt called upon to
fight the recovery after the small
accounts had been reduced, and
these big traders were themselves
assisted by the constructive ele-
ments failing for quick profits.