The New York herald., 1921-03-04
FINANCIAL NEWS
AND COMMENT
Stocks React at End of Dull
Market-Railroad Issues
Hold Well.

The stock market held for time yes
terday the Improvement which began at
Wednesday noon, but the familiar pro-
fessional elements were constantly In
play in the trading and no surprise was
caused by a reaction in the closing
hours. Business was almost completely
devoid of feature. The Street paid more
attention than appeared on the surface
of any OF the markets to the negotiations
in London, but cabled news that Ger
many had several days In which to
reconsider their proposals naturally held
sentiment in suspense. Evidence that
there are readjustments to be made In
the financial field, as we'll as in industry
and commodities was brought forward
by the failure of prominent Investment
have. perhaps. more immediate relation
to local conditions than to the broader
domestic situation. but they have a
material bearing upon the credit and the
money markets nevertheless. Amid the
stress of tho last eight months the
soundness of the machinery for conduct
ing large banking and investment opera
tions has been thoroughly tested, and
the fact that few weak spots have been
uncovered is a matter for congratularion,
While a humdrum affair, the market
for railroad shares was more interesting
than the trading in industrials. A num-
ber of the lower priced rail issues moved
forward in the morning. and several
sharp bear drives at manufacturing and
shipping shares failed to impair the i'm
provement OF the rails. In some quar-
ters where the market movements are
constantly studied for genuine indica-
tions ~f changed conditions the so-called
junior rails are being watched. But the
underlying factors of traffic and earnings
so far have produced little of con-
structive nature for any Of the carriers,
and 1t is difficult to see how improve
ment of income can occur until costs
have been reduced to a minimum That
the transportation companies are work
Ing toward this end is clearly displayed
in the programme of Eatern roads for
reduction of wages, the coming CONFER
ences with representatives Of labor show
ing the direction OF the wind. There Ia
reason to believe that important develop
ments are shaping in respect to labor
costs which. at the least will tend TO
hasten action in regard to the apphca-
ton of wartime measures to current
railroad affairs.
The bond market continued the grad
ual improvement noted on wednesday.
and this, too. had reference to num-
Der of funded issues of the smaller rail-
eystems. Foreign bonds were somewhat
unsettled, O quite natural result of the
reparation situation, but the price
changes were not extensive. In the for
eign exchanges a strong tone was evil
dent most of the day; it is not too much
to believe that spectators, always active
in this market, would take advantage of
present dull business to seek to discount
favorable event in London. So both
advances and declines in sterling, francs
and marks are likely to have little real
meaning until Lloyd George and his coll
leagues have a definite announcement to
make. Sterling left of rs cents higher.
with less extensive movements among
other European rates. Call money was
Z per cent. all day.
Cotton did very little. but there was
an advance OF to 5 cents in wheat fu-
lures in Chicago.
The French Government Is a heavy
borrower at the Bank of France and the
weeks statement of the Bank of Eng
land shows that the monetary situation
is by no means easy. The Bank Of
France reported an expansion OF 1885,
10000 francs in circulation and adj
vances to the Government increased 40o.-
100000 francs. These loans have ex-
panded some 7oo.Ooo,Ooo francs in three
weeks. The Bank Of England's reserve
ratio declined from 14.99 per cent to
1924 per cent, due In part to a heavy
Increase OF loans both public and pri-
yate