Evening star., 1921-08-26
SHARP RECOVERY IS
MADE IN MARKET
Shorts Run to Cover-Gains
Scored in lndustrials.
Sentiment Better.
ny STUART p. WEST.

NEW YORK, August 26.-There was
no adequate explanation in the out
side news for today's sudden and very
sharp advance on the stock exchange.
The weekly statements of the fed
eral reserve banks were remarkable.
showing the general reserve ratio up
to a new high OF s6.5 per cent. with
jump from 1872 to 74.6 per cent In
the New York district.
These increases, which again sug-
gest the likelihood of another reduc-
ton in discounts at the eastern CEN
ters. were promptly followed by a
drop In the call loan renewal to b per
cent.
But. inasmuch as the stock market
right along has ignored bank reserve
increases and dips in money rates.
given the credit for the days uptarn.
Another incident with important
possibilities for the entire situation
which might well have a bearing upon
the movement in stocks was the fur
ther violent run-up in cotton prices
At the high of the day some OF the
cotton options were up about l0O
points as compared with where they
stood on Wednesday. The significance
Of this advance for the bank posi-
tion and. in fact, the whole business
outlook in the south. is sufficiently
obvious
But the movement in cotton. while
1t contributed to the better feeling in
Wall street, could not be set down as
the main influence.
shorts Rush to Cover.
The chief reason for the rise in
stocks was simply that the market
had been going down with very little
interruption for nearly three weeks.
The short interest had grown to large
dimensions. including in its ranks the
trading rank and file, whose presence
always weakens any speculative posi-
tion.
That it was getting to be increas-
ingly difficult to obtain stocks for
borrowers purposes was pointed out
yesterday. In word. the market
was oversold. and, for certain of the
more volatile industrial issues. heavily
oversold.
Naturally the advance proceeded
swiftly and went furthest in stocks
which have been the special object of
raiding since the first of the month.
Some Big Gains.
crucible Steel shot forward at one
time nearly five points. American In
ternational was equally prominent
and the way it went up showed the
|artificiality of the selling in the stock
yesterday. which had kept on right up
to the close. There were gains
scarcely less abrupt in such issues as
General Electric. Famous players
Harvester, Baldwin Locomotive and
American Car and Foundry. The rails
moved ahead. but more moderately
because the short account in them was
not what it was in the industrial
quarter.
tied with having brought back
around the recent low prices lot
of Studebaker stock. which had been
distributed on the rise across so. pre-
ceding the publication of the mid-yeaI
report They were also given the
count this morning. 1t was the in
itiative shown in Studebaker which
did more than anything else to bring
about the upturn in other industrials
CrucibIe steel.
The jump In Crucible Steel was a
duplicate OF other rebounds which
the stock has had on previous occa.
lending at premium. Yesterday this
premium was "; this morning il
was reduced to lis.
There was no other Significance tC
the advance except that Crucible hat
become rather more oversold thar
most other things. The compan.
does not impart official information
as to the other steel concerns, but
every three months. consequently re-
lance has to be placed upon unoffi-
cial accounts. These have repeated
ly stated that Crucible has been op.
Grating in red figures since the early
part of the year, but the extent ol
the loss is not well enough known to
permit of predictions regarding the
dividend. which was cut in two ir
June and which comes up for con-
sideration again the middle of nex1
month.