The New York herald., 1921-05-10
FINANCIAL NEWS
AND COMMENT
Rail Stocks Move Upward, but
Industrials Drop - For
eign Exchange Off.

| A rather sharp line of cleavage be-
tween railroad and industrial stocks
| appeared at the opening of yesterday g
market and became more pronounced
as the session progressed. Industrial
issues. influenced by heavy selling OF
automobile and rubber shares. receded
at the same time that the continuation
| OF last weeks constructive sentiment
carried the railway stocks upward. The
reason for pressure on the manufacture
ing group lay. undoubtedly. in rather
| unexpected reductions of certain auto
mobile and tire prices. which. whether
correctly or not, was thought by pro-
fessional traders to show that the March
and April expansion of production had
not gone as far as reports indicated.
1t may be that this was the case. On
the other hand. the activity In those
months probably used up a substantial
proportion of high priced inventories,
enabling the companies to let down
selling quotations for stimulating con-
sumption coincident with the receipt
of raw materials on new contracts at
lower levels than those of the winter
and early spring. The extensive ad-
vance of such issues as Studebaker
Chandler. United States Rubber. Kelly
Springfield. General Asphalt. Interna-
nonal Paper and others during the last
five weeks had left them vulnerable to
realizing sales and short selling De-
clines among them ran from 11s to 4
points.
The market was SO highly profess
sional that explanations the reverse of
those applied to the industrial stock
movement might be given for the up
turn of the rails. The speculative COM
munity continues to count on influence
which wage reduction in the manufac-
turing field is likely to have on the
railway labor situation. Furthermore,
1t is felt that processes at work among
commodity and goods prices, although
bound to be depressing at times on pro-
ducing company stocks. contain forces
of future value to carriers. The rail-
road future is dependent not only on
lower operating costs. largely repre-
sented In labor. but also on growth of
traffic In financial and business quar-
ters 1t Is realized that consumption of
goods Is not likely to expand broadly
until prices shall have come down to
levels which will attract the public, and
raj tad
movement of products to the markets.
The advance of a point to points
among active railway stocks yesterday
involved high grade dividend paying
issues and those of roads dividend pros
poets of which were uncertain.
There was slight market influence In
the days news. Although cabled mes
sages from Berlin indicated that a new
German Ministry probably would ac-
| cept the allied demands, the reparation
situation was complicated somewhat by
! the underlined position which the United
\ States Government would occupy In
working out details of arrangements be-
tween the allied governments and Ger
! many. Inc eACndHSeS were III
clined lower. French francs losing a
part OF last Fridays and Saturdays
improvement, while sterling declined
about half cent to the pound.
The Governments crop report as of
May / held out an excellent prospect
for winter wheat. While plant condi-
tion during April receded 2.2 per cent
to sS per cent, the indicated yield OF
2s,2s7,000 bushels showed a gain of
more than 100000 bushels for the
month. Last years yield was 577.763.-
I 600 bushels. The feature of the report
/ was that the survey at the end of April
4 disclosed a smaller deterioration from
weather and soil conditions than had
been expected. The outlook for large
\ and early crop of spring wheat was
held out by the statement that 63.5
per cent of planting was completed by
Nav 1, In contrast to 50.2 per cent. In
1920 and SIS per cent. the ten year
average. Wheat prices worked lower.
continuing last Saturdays movement.
Call money was ia per cent Time
funds we're in supply greater than the
demand at the same figure.