Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-07-06
Fluctuatiion In
Markets Reflects
ECONOMIC Plight
tBy w. S. COUSINS in detroit Free
PreSs.)

(By w. S. COUSINS in detroit Free
Prees.)
New York.-Extreme fluctuations in
all the principal markets reflect above
all things the continued uncertainty
that exists concerning the general
economic situation. These fluctuations
are to be found not only int the Sc
curity markets, but also in foreign ex-
change, wheat and corn, cotton and,
in fact, every commodity that enters
human consumption.
For the most part, the stock mar
ket has beer dominated by profess
SIGNALS, who have been operating for
the decline for enc of the longest
periods within the memory of present
active traders. Encouraged by their
unusual success, and stimulated by
absence of the investing public from
speculative channels, these bearsNhave
mot hesitated to direct their. attacks
against issues. that heretofore Nave
offered a strong resistance TO- Their
that many of them are selling \at
prices that compare ~unfavorably with
the+panic days of 1907.
Lambs Quit Declining Market.
The Wall street lamb is seldom
tempted to try his fortune in, a de-
Ginning market. He does not under
stand the gentle art Of short selling.
and is timid in the face Of runfavorable
business reports. He is most often
clipped at the top level Of, a bull mar
ket buying at top prices after Elm
siders" have loaded up at the bottom.
For this reason the lamb has had little
Opportunity to try his fortune during
the last year; but unless all signs fail.
the ground is now being prepared for
him. Certainly many Of the prime
issues are scraping the lowest levels
they have seen in wears. United
States Steel common, for example.
lowest, price since 1915:
Since May 49,, sterling exchange.
which on that date passed the 81
mark by a slight margin, has \slipped
back over 80 cents to the pound. with
! a slight rebound. Perhaps the best
explanations of the present erratc be-
havior of the sterling exchange mar
ket are to be found in the London
cables. For one thing. the mechani-
cal process of the reparation payments
has completely upset the calculations
Of economists on both sides Of the
water.
Dollar Demand Upsets Rattons.
h Stimulation that a considerable por-
!tion Of the payments be made in dol
lars has greatly increased the demand
for American currency in London,
destroying temporarily the ratios that
had been established between the
value Of the dollar and the pound
sterling. Continental exchanges on
London have been affected by move
n,ents in the London-New York rate
but not so violently as sterling in this
country.
British bankers freely express the
opinion that sterling may go cor
siderably lower, because of the
method pursued by the r~eparations
com mission in prescribing dollar pay
'ments by Germany. The British gov
eminent also is reported buying dol
lars for coal payments. =
But it is not,so easy to explain
why the French frame keeps drop
pinr IL view Of continual betterment
in the economic condition Of France.
For one thing it must be considered
that SPECTATORS in exchange do not
|fArines, When. sterling declines heav-
lilv they also sell franct and lire on
the assumption OF az sympathetic
movement in all the European ex-
changes. The n impression is
nreyalent also in France and England
lhnd some time must elapsd before an
idea Of this. kind can be& mod1hed:
But if the e~conoralcal sltFatIon q
England continues to grdw worse
while that Of France 'innprdves as it
il now doing a new ratio between the
franc and the pound sterlingA must OF
necessity be established.
Eord Market Severely Strained.
There is a feeling in tnyestInent
l-c,rcles that the abscrptive powers OF
fine bond market have been put to TOO
severe a test. This is not to say y a
All the huge new issues have not been
fully subscribed for. but the bripsifg
a,,t Of these large Rotations has Nrs-
suited in lower prices for existing is
sues. and the progress heretofore
made IN bond prices practically has
been lost. It is not uncommon. Tor
example. to see high grade invest
lment securities fuctuate as much as
three, fulr points on the stock ex-
change in a single day. Such condi-
lions do no make for stability In the
most important phase OF n invest
ment situation. Investors do not ike
TO see high class bonds gyrating
around like mining stocks or specu-
industrials.
Nevertheless. the widespread dis
ltr;bution of new offerings is indica-
htiva Of the tremendous capacity OF
American Investors TO absorb attrac-
tttiya issues Prior. to tha war. IT is
stated. the major syndicate lists O
distributing bankers did not contain