Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1921-09-06
HOPEFUL SIGNS
READ IN RECORD
RISE OF COTTON
business Sentiment Hasn't
Begun to Measure Benefits
of Upturn.
STREET IS WAKING UP
Special to Indiana Daily Times
and Philadelphia Public Ledger.
By MONITOR,


BY MONITOR.
NEW YORK. Sept. Cit has been ex-
tremely difficult for any development of
an encouraging or constructive character
to gain recognition or make Roadway
against the prevalent tide Of pessimism
in market circles. For a time it looked
IS if nothing that was not bearish would
receive consideration. Many Of the fac
tors responsible for the decline in securi-
ties and the depression IN business long
since have exhausted their efficacy like
a storm that has passed out to sea. but
the havoc wrought on nerves and views
has remained.
The chief bear factor was the strained
banking position and the accompanying
decline In the Federal reserve ratio. The
banking position Is now sound as dol
lar. and the ratio for the combined Fed
reserve system is 66S compared with 42,5
a year ago. Predictions have been rife
that no wage reductions could be eStab
Hshed by the steel industry and railroads
without q bitter labor war. These gloomy
forecasts apparently were without basis.
Wages have been reduced. the operating
costs of the railroads have been cut and
the production costs in the steel industry
have been substantially lowered.
One of the discouraging features from
market standpoint has been the failure
Of financial sentiment to respond to
those constructive elements. or to be
cheered BY the fact forebodings Of dis
aster have not materialized.
RECORD PRICE OF COTTON
POWERFUL FACTOR.
One development. however. injects a
new and evidently powerful factor into
the situation. This is primarily the rec
ord rise in cotton prices and its in
/. evitabie repercussiOns elsewhere. It Is
doubtful if business sentiment even has
begun to measure the results of this
"a 1yement and its ramihcations. Basical
II Qeaking, il starts with cotton. At
the nd of July the South had a carry
over in the cotton belt-this should not
be confused with the world carry over
of 100000 bales.
According to the Bureau Of Crop Esti-
mates, this is likely to receive an ad-
dition of 100000 bales. This is a total
Of r. 00, 600 bales.
On Aug. D. taking the New York Oc-
tober position as a basis, cotton was
approximately Is cents a pound. On Fri
there are few cotton men who do not
believe it is inevitably destined for still
higher prices. This is a rise of ) cents
a pound, or roughly speaking. S25 per
bale. In other words, the South stands
a good chance of realizing in the neigh
oorhoOd of $300000,000 more for its pres
ent and prospective supply than 1t was
believed to be possible to obtain barely
two weegs ago.
Reference has been made in this col
unn heretofore 10 lie effect Of this vast
increment on the fortunes OF the South
the thawing Of frozen credits. release Of
bank loans, improved collections and in
creased purchasing power. For exam
pie, one of the big sugar companies Is
said to be highly pleased over the pros
poets OF collecting nearly 100000. 600
which until recently had seemed almost
indefinitely tied up Fertilizer companies
next year will have big sale for their
products, not only because the South will
be more prosperous, but because the need
Of artificial plant food Individually has
been demonstrated
LEAVES ITS EFFECT ON
DRY GOODS MARKETS.
The ramifcatiOns exteno still further.
Dry goods markets have been stimulated
tremendously. Some makes Of cloth are
10 cents a pound below their levels Of
month or so $50. Yarns have risen 3
to cents pound almost over night.
Manufacturers, caught with high priced
raw material on hand before the slump
Of last year, will welcome the rise in
cotton as stlmulant tc the sale of
goods and substantial increment from
an inventory standpoint.
This addition Of several hundred mil
lion dollars to the wealth of an impor-
tant agricultural district will result In
far greater benefit than several times this
amount in the form of credit through
governmental aid Wall street is be
ginning TO wake up to the Importance of
this development. Possibly the fact that
speculation has had something to do
with the advance in cotton has caused
the Street to prick up its ears. At any
rate, it is beginning to find out that
prices can 90 UP as well as down. and
that is a step toward a bull market
Copyright 1921, by Public Ledger Co.