The New York herald., 1921-11-15
FINANCIAL NEWS
AND COMMENT
Stock Market Reacts Sharply
While Exchange Improve
on Armament &ws.

III uiverse ways yesterdays markets
registered the play OF public sentiment
toward the reactions of the leading ma
tons to the American proposal for ilnn,e-
diate curtailruent OF naval power. The
sharp reaction OF stocks. however. was
evidently less the effect or armament
considerations than the natural product
OF speculation for the rise, which
reached a headlong pace In some direc.
tions last week. Once traders began to
take profits--and they ran from to 25
points and more--the outflow OF offerings
was expanded through the uncovering of
stop loss orders and weakness becnme
more pronounced as time passed.
The cotton market was directly op-
postte to the market for stocks. prices
advancing during tho morning $3.50 to
s4 bale and ending the session with
about half the gross gains still intact
II Is not difficult to conceive OF an inter-
national Improvement Of manufacturing
and distribution with great load lifted
from the incomes of people In many
countries through q reduction Of taxes
for military purposes. It is probable
that an acceptance Of the programme set
before the armament conference last Fri
day would have only a sentimental sig
nificance for considerable time. But the
economic import OF a general cut In
naval outlay would be felt in business
plans long before economies were ap-
Piled, and the action OF cotton futures
quotations appeared to denote the trad
ing belief In an enlarged consumption OF
the conference would bring an amicable
agreement on major points.
The speculative element In stock mar
lset operations are wont TO take all pos
sible advantage Of events which seem TO
support their undertakings Thus it was
not surprising that steel company shares
should be made the subject of heavy
bear attack. The fall Of slightly more
than points in Bethlehem Steel class A
stock was coupled with discussion In
trading quarters OF the III effect which a
ten year recess In warship construction
on the Bethlehem company's business.
The reasoning back Of that position was
decidedly incomplete. II not faiiacious.
The Bethlehem company's own state
ments from time TO time since the end Of
the war have shown that the percentage
OF its armament business to les entire
tonnage Is small. and as far as the
building OF merchant ships is concerned
the plan for making chances of war
remote should work for enlarged instead
Of restricted activity. as the world would
settle down to peaceful pursuits. The
idea that the steel industry would be
injured In any respect by the deternina-
tion Of the nations to compete In COM
nerce in place Of war and war prepara-
tions Is too ridiculous TO receive serious
attention. But the reaction Of steel
stocks certainly was helped along by the
thought yesterday.
The foreign exchanges responded
brislly to the Washington programme.
even marks showing fair amount of
recovery The news dispatches told Of
an uplift Of feeling toward the flnancia,
future IN foreign centres, and the ex-
changes, which are always sensitive to
alteration OF international conditions.
recorded this at once. Sterling at the
last quotation OF 3.96A was 2ss cents
pound higher than II was on Saturday
Francs and lire improved their positions
and the only trace of irregularity among
the European rates was In the Scandi-
navian list.
CAN money moved down from s u to 4
per cent. The supply OF loanable funds
is likely to be Increased within the next
few days when Liberty bond Interest
coupons are cnshed The Street is look
ing hopefully toward range OF rates
in the near future and in which per
cent. win be the maximum.