The New York herald., 1921-08-12
FINANCIAL NEWS
AND COMMENT
Bears. With General Asphalt
as Wedge, Force Decline
Bank Position Better.

The Impetus supplied by fvo DAYS OF
reactionary prices enabled an sggres-
siye short interest 70 get c0ssid sra BILE
action in yesterdays stock market The
movement was. however. marked by
some rather sharp,declines OF individual
stocks. while the rank and file gave
ground slowly and late recovery found
the rails only fractionally changed from
final prices on Wednesday. Such a
market indicates that bear raids against
lightly protected issues are engineered
with the hope OF forcing general de-
cline.
That an extensive fall OF quotations
has not occurred at any time since the
July peak was reached seems to show
that genuine liquidation by persons
moved to sell by conditions OF credit and
business was well completed during the
spring reaction. As far as the railroad
group is concerned. X may be reasoned
that while the market following has
been disheartened TO degree by the
evident intention OF Congress to post
pone refunding legislation until autumn.
the records Of the next few months are
awaited with confidence.
As on Wednesday, when the specu-
lative fraternity expressed surprise over
Refining Company's common stock
dividend. just so the bears were en-
boldened yesterday by somewhat unex-
pected six months deficit or s91l.50o,
reported by the General Asphalt Com
pany. 1t melted pressure which caused
a fall of 45s points in the companys
shares, and the selling spread out among
some of the other petroleum stocks
Several usually sturdy issues. including
General Electric and Pullman. We're
marked down. the letter recovering well
in the afternoon
Railroad equipment stocks were de-
pressed, but these, with many other
Industrial shares, seemed to become
more stable in late trading when it was
seen that steel company stocks were
holding up rather firmly. The impress
sion has been acquired in some market
quarters from comment and figures
from steel production centres that SO
pronounced a depression as has ruled
for three months is hardly likely to
continue much longer.
The July statement OF export and
import movements or merchandise was
not surprise in that the totals were
the smallest for any month OF the last
five years and more. Imports valued at
s17s.000.o00. compared with s537,11S, 900
sS22. 100000, against 1851, 1860 year
ago, afford a striking commentary upon
the decline OF commerce. The months
excess of s144. 100000 in exports loses
or the heavy inflow OF gold during the
month and the promise that imports or
the metal viii continue on large scale
for some time to come.
Receipts OF gold continue 10 expand
the reserve position OF the Federal Re
serve system the gain in the week ended
August 10 being more than $4,000, 900.
But this feature OF the weekly bank
statement was no more striking than a
rather unexpected contraction of s15.-
929, 900 in outstanding Federal Reserve
notes. fall OF s75942.o00 in bill hold
ings and a drop or $42,594.oo in gross
deposits. In view OF crop demands an
expansion OF notes had been looked for.
also an increase or rediso cunts. The
ratio of cash to note and sposit liabili-
ties in consequence or these changes
gained 1.3 per cent. to 65 per cent, a
new high point.
The New York banks gold reserve de-
clined approximately s6.000.000. but
there was rather extensive contraction
In bill holdings and in deposits, with
recessions OF reserve note circulation
totalling more than 100000, these
factors carrying the reserve ratio from
6s2 to 69.9 per cent. The bank figures
suggested that the maintenance of a 6
per cent. call loan rate at New York
during the current week was in the face
OF growing case through the reserve
system as a whole.