The Washington herald., 1921-06-26
ADVANCES SCORED
AFTER Dull TRADE
In OPENING SESSION
Short Coverings Respon-
sible for Sessions
Activity.
RAILS MOVE UPWARD
Gains of From One to Four
Points Common Among
Industrials.
RAILS MOVE UPWARD

NEW YORK. June 25.-After
quiet opening. trading on the
stock exchange developed active
short covering which increased as
the session went on until the total
sales for the morning approximated
those for the whole of yesterday.
Prices meanwhile moved up strong
ly over the whole list. the gains in
the case of rails running between
one and two points, while advances
of from 1 to 4 points were common
among industrials. The cotton mar
ket brought out a somewhat similar
situation, the July delivery gaining
50 points at 11-2o cents. The Tor
eien exchanges. on the other hand
were dull while sterling up 4 OF
cent at ss.73h, and wheat showed
little change, July selling OF IA
cents at s1.3oH-
Clearing House Statement.
As in the case of the reserve
bank statement, a recovery from the
abnormal demands of the tax date
is shown by the clearing house
statement Loans are less by s1i,-
500, 900, while deposits show a
shrinkage of $50, 100000. Reserve
deposits with the reserve bank are
s2S,70O, 900 less and surplus reserve
has decreased by nearly half, now
standing at S2S,4oo,ooo. Govern
ment deposits have been reduced by
s2o,so0,0Oo.
Dismayed Feeling Evident.
The striking declines which oc-
CURED early in the past week in
some of the chief financial markets.
coming at the end of a prolonged
display of weakness and carrying
prices in many cases below the low
records of last winter, brought
feeling of dismay to many and even
of despair to some. Persons who
had bought standard stocks during
the spring. believing that bottom
had been reached. saw the market
value of their holdings shrink IN
disturbing fashion. A natural won
derment sprang up as to what was
behind II all. as to whether there
was no bottom to the thing and as
to whether some big hidden imam
ciaI trouble existed
Moderate rallies subsequently al
layed these fears somewhat, and II
is now pretty clear that what has
been going on was a mixture OF
short selling and real liquidation.
individuals and business houses
that found dificulty In raising funds
to meet tax payments have had TO
dispose of speculative and invest
-nent holdings. Traders who bought
on margins and on expectations
that the bottom had been reached
have had their margins called and
have had to let go. The weakness
in securities Furthermore has re-
acted on. and in turn been anected
by. the position in the commodity
markets. Thus traders hard hit in
the securities have had to sell
themselves out of commodities such
as cotton, while the sharp break IN
cotton, which was accentuated oy
the unexpected refusal Of the Brit
ish miners to return to work.
caused losses to the longs which
probably necessitated the selling of
securities. The cables, furthermore,
have reported heavy losses by
Dutch interests on account OF the
renewed slump in the price OF
surar. circumstance which has
caused liquidation of other Dutch
assets and has affected the value
Of the guilder in foreign exchange.
Such a background has made op-
.rations easy for the short interest
which in many instances had been
left in dificult positions by the
sprtng rise, and 1t is taking ener-
1.ttc measures to retrieve itself. 1t
Tins appears that we have had
liouidation of the speculative posi-
tions assumed this spring, not only
in this country but abroad. and AZ
fecting not only securities but COM
r,odfties and foreign exchange. The
matter carries, perhaps, its moral
as IL emphasizes the danger partic-
uIarly at such a disodered time,
of speculative and over-e1tension
against investment buying.
beneath the surface there is. II
ts true. a regrettable slowness in
the fundamental processed of read
Iuxtment- Domestic business con-
tinues spotty, with the better actiV-
ity in these issues Of furnishing
goods consumed currently and d.
rectly by the population. and with
industries having to do with per-
rnanent improvements, such as steel
and building materials, giving little
indication of a rally from existing
stagnation. Labor resistance to the
inevitable reductions in wage rates
is still maintained, the Developments
in the British coal strike being par
ticularly Disappointing. and outly-
ing markets such as South America
and the Far East. show little in the
way of signs of impending revival.