The New York herald., 1921-10-10
Short Production Of Commodi-
ties Promises to Stimulate
General Business.
NEW BUYING LIFTS PRICES
Higher Oil Values Evidence Of
New Demand-Bond Market
Activity Increases.

has SO far been borne out that tn,
country's mills are working at abou
/, 3S per cent. OF capacity on the average
IN contrast to less than cs per cent. Il
midsummer. That growth of 10 pe
cent. has been accomplished in two am
half months. period long, enough (,
show that industry. to the extent tina
1t is represented and reflected by steel
is throwing off the inertia of deflatior
with much deliberateness. It is tn,
same way with cotton.
Whenever the price Of cash cotton
has reached point between 2oh and 2
cents pound since the bulge of Septem
Der eliminated 1t has hesitated and
fluctuated nervously. The movemen,
Of cotton prices has been directed large.
ly by the pressure Of offerings from
farm and storehouse, but It has beer
shaped to degree. also. by the hest.
tation Of buyers lest they contract 10,
supplies and then find that consumption
OF finished goods has not grown SUI.
ficiently to absorb the increases OF raw
material prices since the summer low
levels were left behind.
Buying Boosts Steel Prices.
The influences behind steel manufac.
turing and steel prices arc much simi.
lar to those behind cotton. They reflec,
the starvation basis upon which con.
sumption has stood for a year and q
half. A moderate increase Of buytnp
has lifted certain steel prices. The
outlook for cotton crop less than 81
per cent. as large as last years has
helped cotton. 1t is not plain yet whether
subnormal purchases by consumers
since the first quarter of 1920 will bring
buyers into the market on a large scale
in the next few months or whether
price advances which such buying would
bring would keep buyers away. But the
financial markets believe that such i'm
provement Of buying and Of prices as
has been seen is the forerunner of bet
ter things to come and SO are looking
for fresh signs Of business growth.
The new signs supplied most recently
are in petroleum and copper. Statistics
may tell something about the advance
in less than ten days OF 80 to 70 per
cent. in prices OF domestic crude oil.
In the first place. despite business de-
preston consumption has been main
tanned on a substantial scale during all
of this year. In August. a month in
which less was consumed than the
average of the eight months ended on
August 81. approximately 42.76O.ooo bar
rels were used. decline of no more
than 10 per cent. from tho amount
consumed In August. 1920.
Domestic OIL output Less.
Domestic production. which was de-
cidedly heavy in the first five months
of 1921, tapered off with the decline
of new drilling until IN August the
output was not much more than the
4o. .s6O, 900 barrels produced in August.
1890, and the decline has continued
since. At the same time-and this is
Of much importance-imports from Mex
leo have receded until only about q
third as much petroleum is being
brought in as was imported from that
country a year ago.
From the point Of view which the
stock market takes the rise Of pc
troieum prices Is evidence of a growing
demand. signifying that business is i'm
proving. But the subject is open to ar
gument, just as in the cases Of cotton
and steel. whether or not advancing
prices, II they proceed far enough. will
tend to retard instead OF stimulating
business.
The copper market has had a stiffen-
ing of price from 70 to Is cents pound
in a few weeks. chiefly In the last six
or seven days. It is calculated that the
September rate Of sales. including ex.
ports, would reduce stocks in four or
five months to figure comparable witt,
prewar supplies. 1t Is possible that con-
sumers are taking this into considera-
ton and producers are not losing sight
of it in making their prices.
Copper Shortage Possible.
Many mines are closed down and 1,
will require weeks II not months ia
bring them up to full capacity again.
The amount OF marketable copper is not
small enough to impel a sharp rise OF
prices. but II seems to be Of a size to
suggest a coming shortage II consump-
ton expands during the winter
In substance, the rise OF prices for
steel and cotton. petroleum and copper
reflects both slowly enlarging demand
and a short production. The spectacle
OF rising commodity quotations Is stim-
ulating to stock market speculation and.
ut the least, has prevented much re-
action from levels established in the
September bulge. But II Is not clear
yet. In respect to any of these commodi-
ties. that the growing demand is ma
terialiy more effective than the statisti-
cal position of supplies IN shaping
prices, and that is one reason why the
stock market thus far in October has de-
clncd to continue last months ad.
vance In a vigorous manner. although
II has not lost ground