The New York herald., 1921-09-24
FINANCIAL NEWS
AND COMMENT
Rails Lead Upward Movement
in Stock Market-Time
Money Is Easier.

road leadership in yesterdays stock
market lay In the rapidity with which
car trust certificates of prominent
lines are passing from the United
States Railroad Administration to the
Investing public and also in tho evil
dence supplied by earnings statements
of the carriers that railroad expense
accounts are coming under further
control as time passes. Within three
weeks more than s63.o00.00O cash has
replaced. or viii replace as soon as de-
tails are arranged, equipment paper
in the hands of the Government. The
buyers appetite does not seem to be
appeased. The prospect Is for the liq-
uidation of further large blocks of
the certificates. although it is hardly
reasonable to assume that the present
pace can be maintained until the en-
tire amount of s3So.OOO,o00 has been
absorbed
The stock market realizes that funds
obtained from the sale of this paper
are Immediately available to meet
claims of the roads against the Rail-
road Administration. AS the money
is passed out to the carriers whose
claims are recognized, the intention of
sponsors of the Townsend bill before
Congress comes closer to realization.
namely, 20 increase railroad cash, en-
able the roads to pay over due bills
and buy needed supplies and thus in
prove the state of general business It
will be interesting to trace the re-
iexes OF these quick sales on the Con-
gress when the bill comes up for dis
cussion again. But the chief sgnifl-
cance of this form of railroad financing
In practically a new guise is contained
In the extraordinary change which
came over the investment market with
the decline of money rates since Sep
tember 1.
There were few evidences of forced
speculative activities in the days
dealings; in fact. stocks lately churned
about by pool transactions became
more and more quiet as the rails ad-
vanced. The rail upturn was by no
means spectacular. but several impor-
tant issues gained more than n point,
Southern Pacific standing out with a
rise of 5s points to a new high price
of So1s on the present movement.
Study of the Southern Paciflc's Au-
gust income account undoubtedly aided
the advance and the suggestion by the
showing of this line. together with
those OF the Union Pacific and the
Kansas City Southern, is that the tale
of improved net earnings will be con-
tinued as other statements appear.
Steel shares were strong and most
other industrials gained some ground.
ward, q movement which gained i'm
petus from the strong showing of the
Reserve system in the last week Time
money rates were easier in tone than
first grade commercial paper gave
signs of bending below the per cent
level. 1t is not clear, however, thar
the cost of loans for fixed periods on
merchants paper and collateral viii
Immediately move lower in direct re-
lation to the movement of Reserve
bank rediscounts and the expansion of
reserves A survey of the reserve ra-
tios OF the twelve Reserve banks
shows that. while institutions in agri-
cultural regions reduced their borrow
ings from other Reserve banks, the
relation Of their cash to deposit and
note liabilities. in some cases, We're
lowered in consequence.
Cotton prices demonstrated quite
plainly that they have become adjust
ed to prospects of a poor yield and are
feeling the effect of uncertainty about
the attitude which spinncrs are likely
to take toward sharp price advances.
Futures receded 27 to As points, al
though advance estimates of the next
| Government condition report united
in guesses of about AZ per cent OF nor
NAL. Wheat prices again turned up
ward with considerable vigor and other
grains were strong, the broad scope OF
export buying being their main sup
port.