Evening star., 1921-08-25

BEAR MOVEMENT
MEETS RESISTANCE
BY STUART p. WEST.

still sufficient weakness this morning
among individual stocks to keep the
| market unsettled and nervous. But
even from the start there was much
more resistance to the selling move
ment than has appeared on any day
SO far this week. Discovery in the
ing increasingly difficult to borrow
the stocks for delivery made specu-
lators for the decline more cautious,
driven down sharply. the general run
were not affected. On the contrary
there were quite as many points Of
strength as OF weakness.
Underlying the extreme irregularity
in the price movement was a plainly
velopments contributed to this. One
was the description in yesterdays s
reviews of the steel trade of state
Of dwindl:ng stocks on hand, the
all there was considerable prospect
of better times for the steel industry
in the last quarter of the year.
Another was the declaration of the
regular cash dividend on General
|Electric-the stock dividend is not to
although fully expected. led to a sharp
run-up in General Electric shares and
thereby had its effect upon the short
interests in other directions.
Another Helpful Action.
Still another was the action of the
Railway Steel Spring directors in vot-
ing the full dividends on the common,
and what was more. putting out a
statement regarding earnings and
business prospects which took the
street by surprise.
1t was only a month ago when
stock exchange traders sold Railway
Springs common down some Is points
within a few hours, talking about the
bad business of the company and the
duced or passed.
What foundation this raid really
had is now made apparent by the Of
fetal account of things. Not only
were dividends on both classes Of
stocks more than earned during the
first half year. but liquidation of in
Ventories and receivables has in
creased cash and investments so that
these stand at $9.2OO.0O0. Meanwhile,
accounts payable have shrunk to
100000 and the president announces
that the company is experiencing
some Improvement in business condi-
tions."
This episode of Railway Steel
Springs is deserving of much more
attention than for the effect upon the
shares Immediately concerned. 1t is
an illustration of the extent to which
bear" campaigns have distorted and
mlsrepresented many things, and the
excesses to which it is being carried.
Also that 1t does not do, in such a
market, to attach too much signifi-
canoe to the very low prices which
may temporarily be reached as the
ing and forced liquidation.
NAvfcon D><,nua-,.s
Another sign that the market was
getting into better shape was its re-
fusal to be sensitive at all to the
ridiculous performances in Mexican
Petroleum.
This stock took one of its charac-
teristic tumbles around midday on the
rumor that the dividend had been
deferred. 1t broke its previous low
with great violence. then shot for
ward with equal alacrity when the
story was denied.
Neither the downward plunge nor
the subsequent partial recovery evok-
ed the least response from the rest
Of the list.
: Raid Corn Products,
The bear crowd has never had very
much success in raiding Corn Prod
ucts. They tried 1t again this morn
ing with Indifferent results Corn
PRODUCTS insiders are willing to stand
behlnd their stock and have abundant
resources to do 50. SuppoftfnEsordefs fs
at the moment are OF much more con-
sequence than the best Of earnings
statements or the most favorable Of
dividend actions. Corn Products a
little more than earned its regular and
extra dividends during the second
quarter of the year. The latest re.
ports are that IL will do somewhat
better than this in the third quarter.
The reduction in the money value Of
its syrup and sugar substitute busf-
ness Is to some extent Offset by the
much lower prices at which it Is able
to obtain its raw material, namely,
corn.
Stocks Harta to Borrow.
The floating supply Of many stocks
was scarcer this morning than at any
time so far. 1t was evident at times
that this was having a deterrent ef-
feet upon bear operations and was in
ducing a good deal Of covering.
The list of premiums was quite a.
formidable one. Traders short of
Crucible, Lead and United Drug had
to pay 1-32. General Electric loaned
at a premium of 1-32 to Il, Sears Hoe
buck at 1-16, Pullman y and United
Fruit y.