Evening star., 1922-06-17
MEXICAN ISSUES
DOMINATE TRADE
Big Gain in "Pete," Ex-
changes Are LoWer-Liqui-
dation Stopped.
by STUART r. WEST.

NEW YORK. June 17.-Interest was
divided today between the. effect Of
the Mexican debt settlement upon the
market and the continued decline in
the European exchanges. The Mex
ioPn announcement had been expect
IA; 1t was only the terms that were
in doubt. The arrangement Is less
favorable for Mexican bondholders
than that anticipated some time ago.
There is to be no immediate repay
ment of accumulated interest and in
his lies the explanation for the re-
cent s to 10 point decline from the
high prices. On the other hand the
promise of gradual amortization of
these back payments along with the
reduction of regular interest dis,
tribution from next January on would
seem to fully warrant the current
selling prices.
The stocks of American companies
interested in Mexico were bid up for
a time, but the only important move
was in Mexican Petroleum. which
was up altogether at one time l3
points from the low of Friday morn
ing.
In this instance. however. the move
ment was not due so mucn 10 tne
Mexican agreement as 1t was 70 the
discovery of valuable Oil producing
wells in an entirely new territory.
Weakness In Exchange
Weakness in the exchanges. as had
been the case right along. centers In
French francs, which dropped below
the $40 level, as compared with $40
just prior to the breaking on OF the
German loan conference and $50 In
April before the gathering at Genoa
German marks around 80 were very
oh hoi~ n
sterling, at 4.f3ia, was off cents In
the pound from its recent high. These
declines are, of course, the after
math of ghe bankers conference at
Pa..,-Mnich failed because of French
opposition. and reflects unQuestion-
ably international banking opinion
that. without a loan, Germany's abh-
ity to carry out the reparations pro-
gram is altogether doubtful.
In the last half hour of the stock
market steel shares took the lead
End their advance caused prices to
4 drop all through the list. The i'm
portant thing about the market Of
the day was the Stoppage of liquida-
tion, the result of which was that
the trading element operating on the
short side decided that it was time
TO take in some of their contracts.
Mexican Stocks.
The principal response to the an
ment debt was not in the Mexican
government bonds or in Mexican rail-
way shares. but rather in the stock
Of American companies, which had
interests in Mexico. Mexican Petro-
leum had another spectacular ad-
vance. Southern Pacific in view of
its $50, 900 900 investment south of the
Rio Grande. showed special strength
in an otherwise featureiess railway
list. The American Smelling moved
forward for a time, although subSe-
uuently losing it's gain.
The important point about National
Railways of Mexico is the provi-
sion taking away the foreclosure
privilege from the present bonds of
the company, and thus removing any
Immediate fear of an assessment.
VIII Be Assessed.
However. in the end this railroad
cahnot be rehabilitated without lot
of NEW money. and to obtain such
loaN would in all probability necessi-
zate >eitfer some sort of voluntary as
sessment on present shareholders, IN
cluding the Mexican government it
stock, or, what is more likely. radi-
cal scaling down of present capital
obligations.
Mexican second preferred touched
soon after the opening, but was
heavily sold later in the session and
dropped back a point.
The fact that the Mexican finance
minister is to remain in this city
70 take up the question of oil taxa
ton was one of the bull points on
Mexican Petroleum. But OF more
consequence still was the develop
nent of valuable oil-bearing terriotry
m an entirely new direction. A dis
covery we'll has been brought In in
his new territory which is reported
10 be flowing at the rate OF 100000
barrels a day.