Evening star., 1921-08-19
SLOW,
RAILS HOLD WELL
General Market Is Slow,
Many IndustriaIs Being
Under Severe Pressure.
BY STUART p. WEST.

NE" ioHh, August l9.-The low
erinG OF the call loan renewal rate
10 5a per cent was the chief inci-
dent OF another unimportant day In
the financial markets. 1t followed
directly upon the further increase in
the Federal Reserve ratio. both at
New York and for the country gen
orally, an increase which was once
more due to combined addition to
gotd holdings and reduction of loans
ana circulating notes. With u ratio
OF reserve to liabilities for the en-
.ire system of 65.S per cent and OF
ia;a per cent. for the New York dis
trict, the question of another reduc-
llon IN ohciai discount rates becomes
very live one.
The likelihood of such reduction.
along with the present fact of an ex-
panding money supply, again found its
man reflection in the investment and
not the speculative market. Bond prices
continued to work higher. while in the
case OF stocks, money conditions were
ignored and attention remained fastened
upon the trade situation and the dis
cussion of more poor earnings, state
memts and dividend cuts to come.
ihefe was marked distinction, as
there has been right along, between the
movement OF industrials and Of rails
.
OF snort covering. seemed in the eyes
or professional traders to be somewhat
more vulnerable. The rails, on the other
hand. were sustained by the apparently
more promising outlook for early action
upon the refundng bill and still more
by the prospect that July traffic returns
VIII De the most encouraging Of the
season SO far.
Westinghouse Electric.
in
trlc to a new low for the year was
explained in part by the prevailing
business depression and in part by
the company's rather extended posi-
tion. as shown in the last balance
sheet.
On March 81 inventories stood at
the extremely high figure of SOFIA
5s?. These had been written down
at the close of December to cost. or
market. whichever was the lower.
An additional $5,000,O0O had been set
up as a special reserve to cover
further depreciation.
Notes and accounts payable were
over S21.40o.0O0, as against little
more than $15,000,O0O on March 81,
1920.
The business slump did not hit the
esiectric company until the end of
Orders were SO heavy up TO Decem-
Ler mat In Novenbe, $50, 900, 900
ten-year per cent bonds were sold
to provide the larger working capi-
tai needed.
The discount and bankers commits
s27.20O.OoO. More than $4,000. 900 was
spent on plant extension, $5OOo.OOO
went to the inventory reserve fund
and about half the remainder showed
IN the balance sheet investment and
cash increases.
ADDareptlv tho mi &c nm m n
Went to reduce bank loans. But the
main point is the heavy increase in
borrowing, which occurred in the
course of the year, despite the S27,-
100000 of new money raised
Industrial Alcohol Dividend.
Cutting in two the Industrial Alco-
moi dividend was what the market
had expected and it, therefore, oc-
casioned no surprise. AS is the Gus
tom with official statements from In
dustrial Alcohol headquarters. the ac-
companyins explanation was vague
and left the public as well az stock
holders entirely in the dark. Re-
lines were good. but the demand for
the main product--Industrial Alcohol
was poor.
The statement said nothing about
prices. but as told In this column
several days ago. alcohol has been
selling as low as .6 cents a gallon in
carload lots. whereas little more than
year ago it was up to S1.15. At 20
cents, 1t is more than doubtful If
there Is any profit at all in the business.
The company was strong enough
in cash and at the banks-it has been
out of debt right along-to warrant
drawing upon surplus to make up a
deficit But shareholders were not
told. what they would very much like
to know, namely, whether it was
necessary to make such a draft. or
whether the dividend reduction was
enough to cover the deficiency.