The Washington herald., 1921-05-08
PROFIT TAKING
PREVALENT ON
Z STOCK EXCHANGE
Trading Much Less Ac-
tive Than During
Recent Sessions.
MOTOR STOCKS WEAK
Rails Lower BY Small Frac.
: tions; Strength in Foreign
? Exchange Continues.
MOTOR STOCKS WEAK


taking continued and held the up
per hand on the stock exchange
this morning. trading being much
less active than on recent days.
Aoter stocks were conspicuosly
weak. but toward the close de-
elines of about one point were
frequent over the middle list
Rails were lower by small frac-
tiens- strength in European ex-
change continued. sterling touch
ing sxssk and French francs
showing another good gain at s.3I
cents. Wheat broke sharply IN
der the Influence of profit-taking
but made q partial recovery. Cot
ton showed little change.
Last weeks deficit in the clear
ing house banks reserve has been
replaced by q surplus of $500, 900,
the correspoading increase being
4 100000. Reserve deposits at
the reserve bank meanwhile in
fcreased by $500 900 while gov
ernment deposits are smaller by
t27. 100000. Loans decreased ss0.-
soo,ee0 and deposits contracted by
s14.soe, zoe.
Heaying trading in securities
with buoyant prices and somewhat
lighter trading In foreign eI-
change, but with a firm under
tone, were outstanding features of
the past week Stocks continued
TO advance in spite of consider
able profn taking. and many
broke into new high ground for
the year. Previous beliefs that
the Industrial and commercial re-
adjustment is progressing. and that
the point has been reached at
which the stock market anticipates
= revival, have been strengthened.
A worldwide lowering of discount
rates has been taken as another
favorable sign as has reduction of
wages by the steel corporation
while expectations that the Railway
Labor Board will allow reductions
in wages, combined with greatly
Improved earning statements for
March, were the basis for an i'm
pressive display of strength in rail-
way shares. The bond market also
responded well. the volume of ousi-
ness swelling to robust proportions
and prices advancing consistently
In both bonds and stocks the num-
ber Of issues dealt In showed a
marked increase. and public buying
WAS in much greater evidence.
Fsreign Exchange.
Among the foreign exchanges, the
advance in French francs was. aside
from sterling's remarkable demon
strstion of hrmness in the face of
bad economic position resulting
from the coal strike. the most in
seTesting event While the franc
Undoubtedly is benenting by the
cessation in Britain's coal produc-
lion II Is clear that the major fac
tor In the weeks advance Is opti-
nnisB regarding q settlement with
The Germans. Past experience may
suggest that expectation Of such a
setuement II rash, but the basis for
optimism appears much batter now
than ever before. The allies ulti-
matum allows the crop representa-
eive to exchibit to the public a fair
y large principal amount while the
rate of Interest specified enabled
The German representative to claim
that credit at home Germans re-
blize, furthermore. that they can
not expect our help in escaping
from their obligations. and that the
allies are firmly united and are
ully prepared to take strong meas
pres IL necessary. The circum-
|tances have impaired the firm tone
o the exchanges, while the slacken-
ing In the volume of business dur
ng the latter part of the week has
Fenected q tendency to wait for the
lctual decision in the matter.
Trade Revival.
Much remains to be done before
he readtustment is completed, and
ny revival Of trade during the sum-
per must, of course, be of a mild
haracter. There is much to COM
mend the view Of well-informed
British observers to the effect that
ne next few months will be much
etter for securities than trade.
according to this view money will
,.cOme easier during the summer
% q by-product Of trade depression,
nd securities will rise as a result.
Che real test on this basis would
ONE in the fall, when an sctal re-
dval Of trade might again tax
redit resources. tighten money, and
% curb the rise of security prices.
However. such q Tightening would
eem more likely to occur in Eng
and than here. since their bank re-
erves are relatively weaker. The
present situation may be summed
ID, perhaps, by saying that while
he time and extent OF our trade re-
ival Is still uncertain. current
vents suggest that 1t has a real
hance Of coming off by fall, while
he condition of the money market
nd the psychology Of the investing