New-York tribune., 1921-11-15
Stock Prices
Lower Despite
Better Tone
Foreign Exchanges Reflect
Optimistic Views Of Arms
Farley: Steel Shares De-
pressed by Developments

Wall Streets response to the Hughes
program for armament limitation was
complicated and difused. Americas
financial leaders were unanimous in
i stamping the recommendations as
freighted with tremendous possibilities
for bringing economic and moral re-
lief to the whole world.
And yet the average quotation of rail-
road and industrial stocks declinnd.
This general moderate setback re-
suited from special weakness in the
steel stocks. which originated from the
belief on the part Of certain aggres-
sive traders that halt In war ship
building would react unfavorably on
earnings Of the steel companies.
The constructive nature Of the arma-
ment proposals was reflected in
changes in the markets most delicately
adjusted to reflect the effect of such
news--in the foreign exchanges and in
the dealings in European and Japanese
bonds. Because Of the striking rise in
the bond market, since July, which has
been accelerated in the last fortnight,
foreign bonds were less favorably
situated technically for further rise
than the foreign exchanges, which
spurted upward with marked vim.
Sterling cables closed at $S.97, COM
pared with ss.94N on Saturday; French
francs, at 7.30 cents, compared with
72SM cents; Belgian francs, 7.o5 cents,
up from 6.95 cents; German marks,
SsM Of cent, up from 81 Of cent,
and Japanese yen, 1925 cents, up from
4s.12h cents.
In the cotton market, TOO, which
traditionally rallies as result of
events suggesting peace in place Of
war. there was rise Of cent pound,
after last weeks reaction. At the close
the net gains amounted to 20 to 40
points. At the wheat pit. however,
where war is more bullish argument
than peace, prices receded from 3ss to
3% cents.
In the e-eak in the stock market
tss s,~aa:s difficult to understand, un-
less viewed in proper perspective. For
a week quotations have been resisting
the widely heralded downward reaction.
Possibly the expected favorable aspects
Of the Conference on the Limitation Of
Armament was a force making for
last weeks strength. With the good
news out, operators in quest Of lower
ing prices met with less opposition
yesterday.
At the opening quotations were frm
The weakness was first manifest in the
are the principal armament makers.
The easiness in the steel stocks be-
came intensified, and by the afternoon
the trend became general. Outside
Of the steel stocks the reaction was
slight.
It Is conceivable that limitation
Of armaments might adversely affect
the earnings Of steel companies. But
offsetting the naval business lost
| would come to world business from the
| diversion Of effort and energy from
making instruments of destruction to
! the more economic task of building
tools and articles of consumption use
full to mankind. A limitation of arma-
ments would forecast further stim-
ulus to trade through a lessening
Of the burden Of taxation and
also through strengthening the finan-
cial position of governments by
enabling them better to live within
their means. 1t is unlikely that basic
industry such as steel would fail to
participate in a general Improvement.
Judge Gary thinks the Hughes pro-
posal favorable to the steel industry,
as we'll as to the world generally. It
is true, on the other hand, that if a
program Of limitation of armament
should be adopted, the expected good
results would come from over long
period Of years, whereas the adverse
effects on the armament makers would
be felt forthwith.