The Washington herald., 1921-08-27
STOCKS ADVANCE
EACCOMPANIED BY
WEAK EXCHANGE
Reversal of Form Most
Noteworthy Feature
OF Market
SHORTS UNCERTAIN
Suspicion Exists That Short
Operators Are Not Con-
fident of Position.
SHORTS UNCERTAIN

z NEW YORK, Aug. 26.-rhe most
noteworthy development in the fl
nancial markets today was a sharp
rise in stocks accompanied by weak
ness in foreign exchange. thus re-
versing the trend which both these
markets displayed earlier in the
week. Beside the rise in stocks was
the suspicion that operators 'on the
short side could not be really con-
fident Of their position wnen tney
resorted to such tactics as the Mext-
can Petroleum dividend deception
yesterday. The two periods OF ad-
vancing stock prices. one commence
ing at the opening hour and the
other beginning in the early AFTER
noon, were seperated by a period OF
reaction and irregularity. Short COW
ering was apparently the reason for
both the forward movements. for
the advance was most pro-
nounced in those special issues
which had been the easiest victims
Of bear pressure. Gains of I to
points were spread over the entire
list Of Industrial and railroad
stocks. Call money renewed at 5
per cent for the first time since
August 2.
The exchange market was very
irregular at the opening with pro-
nounced recessions in the quotations
on the major countries. This de-
cline came after a consistent ad-
vance TO the highest levels within
the past fortnight Some of the
loss waA~ recovered later In the day.
however. after the shorts had begun
To cover Sterling at s3.6s% in the
late afternoon was about a cent -
low yesterdays closing. Francs were
down 8 points at TIA cents. Guild
ers again were one of the active
features in the trading. but at 31.13
cents were points below the pre-
vious close. All the central Eu-
ropean exchanges were weak. Marks
were heavy at 1.17h cents Ru-
PEGS recovered from their reaction
of the previous day and were again
quoted at 2s.25 cents. the high price
for the year. The strength OF the
rupee Is interpreted as one OF the
hopeful signs of economic recupera-
ton in the Far East
Federal Reserve system
The Federal eserve System as a
whole continues to show improve
ment. the ratio of reserves to de-
posit and note liabilities gaining y
Of 1 per cent this week and reach
iu- a new high mark Of 66.5 per
eant A. rain Of SIS non. mo in gold.
sccompanied by a reduction OF s17.-
700. 900 in note circulation explains
WHY the reserve position was
STRENGTHENED in spite OF small
expansion in deposits. The heavy
decline in note circulation brought
the total Volume of reserve notes
"a a point 81 per cent below the
peak reached at the close of 1920.
and lower than at any time since
February IS, 1919. 1t is nearing the
time when seasonal increase In
note circulation is due. and It will
be interesting to observe whether
the increased gold holdings Will az
feet this movement
While the general position OF the
system was strengthened during the
week. an ANALYSIS of the adjusted
ratios for the different banks cal
cluated by leaving borrowed re-
serves out of account. Indicates that
the stronger banks gained reserves
while the weaker banks lost the
banks at Cleveland. New York. Kan
.as City. ana San Francisco each
gained more than l Der cent. while
those at Atlanta. Minneapolis, and
Dallas each lost over per cent.
The adjusted ratio for the Dallas
bank fell to a new low Of 12.5 per
cent. owing doubtless tn the heavy
demands arising from the movement
Of cotton. Inter-hank borrowings
Increased during the week to nearly
sss nnn. 600 the LARGEST figure, since
early In February. because OF tn
substantial Increase on the part
of the banks at Atlanta. Minneapo-
lis and Dallas