The New York herald., 1921-06-10
FINANCIAL NEWS
AND COMMENT
Many Stocks at New Lows
on Renewed Selling-Ex-
changes Fall Further.

A combination OF unfavora Bile indus
trial news, comprised in passed or re-
duced dividends, with unsettling aspects
of the Mexican situation. induced a
renewal of selling of stocks on a broad
scale yesterday. and many new low
records for the year were established.
Industrial shares of all classes declined
a point to more than points, and weak
ness extended into the rails after the
first half hour of business. Another
sharp break of the foreign exchanges
tended TO disturb sentiment. A factor
TO lend support-an easement of call
money-had no effect whatever in stem
ming the output of sales and in stimu-
lating buying from professional sources.
The lowest levels of the session were
reached at the close by numerous issues.
Call money in late loans was obtain
able at per cent. on the New York
Stock Exchange and at per cent. In
open market transactions.
A definite reason why Mexican Petro-
leum should have been depressed was
contained in the plan proposed by the
Government of Mexico to increase the
export tax on oil to the extent Of 25 per
cent At time when consumption of
petroleum is being adversely affected by
conditions of business and shipping. it is
clear that a total impost amounting to
approximately two-thirds of the selling
price of Mexican crude oil would present
a serious difficulty for producers. The
forces which helped thrust United States
Steel common down to a new low point
for the year were outlined less clearly
than was the one behind the pressure on
oil shares. but they were discerned in
current news from the steel and iron
trade. The suspension OF dividends by
two leading fertilizer companies. the
American Agricultural Chemical and the
International Agricultural Chemical, was
a reflection of the slump which has oc.
Cured in purchases by farmers and OF
| the slow collections which have troubled
those companies all of this year. Tn,
elimination OF dividends IL considered or
occasions as the product Of influences o.
| the past. but such is not the case with
those payments of long history which
! have been going overheard in the las'
three months. In steel. fertilizers, cop.
per and other lines the conditions neces.
stating adverse action by directors are
still current. But the business field Is
not depleted of signs here and there of a
slowly growing improvement. and the
tainly Is something to be cheerful about
even though q factor in the retirement OF
loans is slackening in the demand for
business purposes.
The weekly statement of the Reserve
| system recorded yesterday a substantial
contraction in the use OF credit ant
currency. Total bill holdings wer,
s37, 10000 less than they were a weel
before, and Reserve notes outstanding
disclosed a drop of $40. 1000. Again
/ the gold reserve expanded largely, the
/ growth IN the week being $4,000, 900
The rise OF nearly a full l per cent In
the ratio OF cash to deposit and note
liabilities made the resultant figure $50
per cent. the highest since August 16
1918. The New York Reserve Bank
gained no less than s35. 900, 900 through
the gold settlement fund, and the gold
reserve advanced s51,70o,oo0 at the
same time that bill holdings fell s44.-
100000 and circulation receded. SIS, ,o00.-
900. Those changes resulted chiefly in
an advance of the reserve ratio from
sos per cent. to 64.2 per cent.
The market In sterling was in a state
Of decentralization during the morning
so great that difference OF fully 2
cents to the pound was reported by
banks in reckoning the lowest prices
at which business was done. Upset by
a fall Of 9 cents in London before trad
ing began here the sight rate went
down to 8.6ei5--one or two banks re-
ported II at 3.61 1a-whence a recovery
to s.7sH occurred. A Government de-
cree in Brazil stopped all speculation
in the exchanges.