The New York herald., 1921-09-06
Coming Event. OF influence.

Incidents OF interest and significance
which have not yet been reflected in
the market in the New York Stock Ex-
change, but which are certain to be re-
Elected when the market gathers mo-
mentum, include: Completion without
dslocation OF exchange of Germany's
hardest hurdle in connection with rep
aration payments; the agreement ef-
fected to consummate future payments
in kind instead of all cash; wholesale
recovery in European exchange rates
with sterling at one time up 5ia cents
to the highest level since June: adj
vance in reserve ratio for the twelve
consolidated Federal Reserve banks to
the highest of the year and for the
reserve bank OF New York to the high
est since the autumn of 1917: the indi-
Gated yield Of the cotton crop, placed
by the Government at approximately
100000 bales.
Outside OF the Minneapolis district
the points in the Federal Reserve sys-
TEN OF lowest reserve ratios are all
considered in the cotton belt. Thee
points are Dallas with 40.1 per cent.
reserve ratio: Atlanta with 40.S per cent.
and Richmond with 401 per cent. The
total crop TO be expected this year al
most exactly equals the carry-over re-
ported on July 81 by the New Orleans
Cotton Exchange as 7.0390oo bales. Thus,
to care for the early requirements OF
consumers and to be available as the
entire supply until the crop of 1922 Is
ginned are only about 100000 bales,
which was only slightly above the pro-
duction OF 1890
In consequence. bankers forecast the
absorption at reasonable prices of the
accumulated cotton in the South, the
gradual release of its frozen credits"
and the Strengthening immeasurably OF
the weaker links in the reserve system.
In other words, bankers look for still
further improvement in the reserve
ratios OF the Federal Reserve system.
the gain thus far having been accom-
plishcd by the influx of gold and by
the drastic liquidation nearly COM
pleted in districts other than the South
and the Northwest
The European situation has well
turned toward the constructive side
and the major problems before finance
now are segregated in Cuba and South
America. The former will be aided by
the loan OF s50ooooo0 now under discus
sion and the latter could be helped
materially BY the release OF yellow
metal in Argentine and Uruguay
The most surprising development OF
large demands on credit for the autumn.
At this time of the year reserves tend to
ease off and their maintenance and even
increase must he ascrihed to the weekly
arrivals OF gold. carrying the stock to
new high levels. and TO the delay in
starting the usual sea sonal business
activities Many Industrial corporations
are lenders OF money on large scale.
and the fact that they In some cases
have put out time funds for six
months period indicates an expectation
OF relatively quiet trade and commerce
for Some months.
The continued contraction In Federal
note circulation. which is now $751;
100000 for the system lower than 1t
was a year ago. is another example or
business world.
Tho aim OF the Federal Reserve au-
thorities to cut in half the total bills
on hand has now ocen realized. the
total for the system last Thursday hav-
ing been s1.527. 7.255.000. compared to
t3.05S.42S.000 yeav ago. In New
York alone tho total bills on hand are
only ss71.27i ,5ss. compared 10 more
than $500. 100000 year ago.
The trade reviews at the end OF the
month were slightly more encouraging.
but bankers and business men are stiIi
undecided as to. the eignificance of the
Improvement. which may be a mere
seasonal spurt or. less likely. something
more substantial. feature OF the
week was the enormous exports OF
wheat. including flour. from the United
states and Canada. aggregating 1885
57S bushels. the largest on record. In
the iobbing trade there was n larger
volume Of trading fo- nearby fall ac-
count.
A reduction or unemployment Ia re-
ported from several important cities.
and there was a marked upward surge IN
prices OF raw cotton and cotton goods.