The New York herald., 1921-10-08
FINANCIAL NEWS
AND COMMENT
Oil Stocks Advance Under In
fluence of Higher Petroleum
Prices-Call Money Up.

The movement OF stocks yesterday in
dicated that consideration OF recent
events in the Industrial field was affect
ing quotations. Fastening short covering
In certain directions and checking sales
for the fail OF prices. Thus the market
following was persuaded by the third in
crease OF the Pennsylvania crude oil quo
tation In ten days that consumption was
making sufficient important inroads into
stocks to urge buyers to stimulate pro-
duction by raising prices. With the ex-
ception of the erratic Mexican Petroleum
shares, oil issues generally gained ground
with fair show of vigor. The copper
stocks bore witness to firm position of
the metal, which Is commanding 12N
and 13 cents a pound. against IL cents
few weeks ago. by holding their gains of
the preceding three sessions and adding
to them. Cruciblo Steel advanced moro
than point and others were fractionally
higher at the close than they were on
Thursday. The majority of railroad
shares moved upward.
What has been going on in oil and
copper OF late can be argued as bringing
new evidence Of business growth into
sight or as merely continuing the tale Of
gradual business extension which began
In August But either way the result Is
the same. First it was textiles. then
several kinds of building materials, prod
ucts which passed earliest into defla-
tion last year, and now it is steel, oil
and copper that are slowly pressing for
ward toward period of normal con-
sumption. The stock market has be-
haved for the last two weeks as though
buyers were fearful lest they proceed
ahead of business improvement and so
meet with price reactions as the market
waited for industry to catch up. But it
has been noticeable that the reactions
which short sellers have caused have
been slight In extent and when one or
two groups of stocks were being forced
back others were going ahead.
The impression is growing that rail-
road executives are being pressed so
closely by shippers and others to move
for lower freight rates that they may
make proposals 10 the Interstate Com
merce Commission before long. But It
seems hardly likely that the carriers
will consider seriously such a pro-
gramme until they have assurances that
concessions In wages can be made.
Quite likely uncertainty about rates
and wages has acted to retard specula-
ton In railroad shares, and it is con-
ceivable that even with good net earn
/ings statements in the next few months
the rail securities will feel the onus Of
that double burden. Next weeks meeting
of railroad managers in Chicago may
throw some light on the rate outlook; at
any rate, an expression OF opinion
about wages is looked for.
Quick subscription Of $24 .0O0,O 900 Of the
State of Queenslands and the City of
Rio de Janeiro's long term bonds yes
terday removed any doubt about the
sustained strength Of investment de-
mand that may have existed. Liberty
bonds again advanced strongly. The
bond market and Its relationship to the
money market were especially interest
ing. inasmuch as supplies OF call money
we're restricted and the rate went up
from AZ to 5ia per cent. The movement
intimated that interior banks were
drawing extensively on their New York
correspondents. which may explain in
part last weeks sls.oOo.o0o decline of
rediscounts. which reserve banks of the
agricultural districts had lodged with
other reserve institutions. A portion of
those loans has been cut down through
liquidation of commodities, but it would
be possible for the reduction to be ac-
celerated through the transfer of de-
posits of interior banks from Eastern
centres. Interreservc bank borrowing is
at its lowest point since the middle OF
July.
Cotton and grain were weak. feeling
the persistent flow OF supplies from the
farms. Wheat futures went to the low
est points of the season, receding to
3is points. Foreign exchanges were
steady.