The New York herald., 1921-09-12
FINANCIAL NEWS
AND COMMENT
Last Weeks Markets Reflect
Improvement Of Sentiment
in Business.
COTTON HAS WIDE SWINGS
Speculation Restrained by
Rule Of Exchange-Stock
Trading Is Orderly.
COTTON HAS WIDE SWINGS

business. which was noticed first In
surveys OF trade conditions around the
end Of July and steadily became
stronger thereafter. bore fruits in last
weeks markets Speculation in cotton
was restrained only by the rule that
trading must stop when prices have
moved cents pound IN one direction
in a day. Buying for rise OF stocks
was orderly at all times. but whenever
forces working for reaction came into
play quotations displayed resistance.
and, once pressure was lifted. resumed
their advance. Wheat movements were
less conclusive of a changed market at
titude. but the future options In the
closing days of the week recorded a
strong undertone. which appeared to re-
fleet underlying conditions of supply
and demand. Only in foreign ex-
changes, viewing the markets as
whole, we're there unsatisfactory quota
tions, and they centred chiefly In the
German rate, the decline OF which to q
point at which the mark was quoted
at only shade more than a cent, was
explainable by the strain applied to
German finances by reparations pay
ments.
There was no mistaking the tendency
OF prices in leading markets. Such
swings as cotton experienced. of course.
were not directed altogether by pure
economic influences. or, far as sur
face indications went. was the advance
OF stocks the product of sudden public
interest. Speculation of the headlong
variety in cottons and of the made to
order kind In stocks was the dominant
instrument In the weeks operations.
and therefore one should not build too
high hopes on the permanency OF the
price advances. Buying OF cotton had q
great deal of snap when quotations were
rising. Selling had snap when down.
ward dips occurred. Much OF the arti-
ficial and the unsound Is attached to
trading which will carry cotton upward
$40 bale in the morning and send 1t
down $40 a bale In the afternoon of
day. Violent movements Of that char
acter betoken a market filled with con-
tracts taken on In the hopes OF quick
profit-profit taken with utmost des-
patch when prices weaken and without
regard for anything except that a spec
ulative movement offers chances for
easy money.
BETTER Autumn Trade Expected.
In seeking more lasting and impor-
tant features Of last weeks markets.
the spectacular should be set aside
while several fundamental things are
considered. Unquestionably the Inn
provement of stocks had it's basis in
tho growing feeling in financial circles
that autumn trade would be better than
was the trade of the spring and the
summer: that the railroads were begin
ming to see their way to real. although
perhaps moderate. profits as the vol
ume OF traffic should improve; that the
South. through the rise of cotton prices
from the discouraging June levels OF
IL Ia to IL 1-2 cents q pound. would be
able to liquidate agricultural loans and
enlarge It's consumption Of things
which manufacturers have to sell: that
The Reserve system was In position
to finance expansion OF industry and
business and that Congress when It
convened would be inclined to tighten
some of the more grievous burdens
which had been weighing down busi-
ness and retarding business initiative.
No surety exists that cotton is going
to stay above IS 1-2 or 90 cents a
poand while the crop is being market
ed. even though statistics indicate that
the world Is facing shortage In ex-
cess OF 100000 bales for manufacture
before the 1922 crop comes to the mills
Calculations cannot yet be based on
normal consumption. as the financial
position OF many foreign countries
make It certain that consumption must
be subnormal In the next twelve
months Last weeks dealings regis-
tered primarily the expectations of
spec dlators The opinion of spinners
about this years crop. whether or not
100000 bales or possibly less will be
enough to go around with the carry
ever from 1920, has yet to be secured.
and the eagerness or reluctance OF
manufacturers to buy cotton will be
ihe vital fnctor in the markets OF the
next few months.
Cotton Market Awakens.
The most important fact about last
weeks cotton prices was not that they
once got above % cents a pound for
the more distant options or that they
went above 20 cents a pound for the
'irst time In nearly nine months. The
sreat event was that cotton broke
nway from the inertia which had ex-
isted for three months until the mid
lie OF August and showed. not only
hat the certain outlook for an excep-
tionally small crop but also that the
aonsciousness OF improving trade con-