Evening star., 1926-09-18
CURRENT REACTION IN STOCKS
USUAL LATE SEPTEMBER MOVE
Commodity Prices Are Low, With Condi-
ton Notable in Cotton-General Busi-
ness Still in Large Volume.

is hound to tell on the future buying
power Of large districts in the South
and in this way reveal itself in trade
generally.
The steel compa nies booked un-
usually large orders In the Midsummer
and they are maintaining high rec
ord during the current month. IL VIII
he interesting to see whether vol
ume of IS per cent Of mill capacity
can he handled profitably with steel
prices on the average as low as they
are now.
This is a point which will he dem
onstrated In the steel report for the
third quarter. 1t is always considered
significant when the market for iron
and steel scrap develops a tendency
one way or the other. and the scrap
market at Pittsburgh Is reported
weaker with quotations on cast iron
and steel the same as they have been
all along. which means low level.
Railroad Outlook Favorable.
1t is commonly agreed that while
the railway shares had a substantial
rise between their low points Of the
Summer and their recent highs. they
are still faced with an excellent out
look. Traffic over the transportation
systems of the country continues to
surpass all records. and this condition
is likely to continue throughout the
Autumn.
The difference between the carriers
and many industrial establishments
Is that the former, by reason Of long
years OF exceptionally high mainte-
nance appropria tions. have got their
operating costs down so that gross
increa ses show up pretty thoroughly
in net. In many industrial lines vol
ume Of business Is satisfactory, but
the profit margin is not. because
prices have not heen raised sufficiently
to offset labor costs.
Foreign Securities Strong.
No change has occurred in the
money market Rates both on call
and time loans are the same as
they were week ago. The uc-
cess Of the Prussian state loan
brought out on terms more favorable
to the borrower than any Gerna
loan since the war, had a stimulat
ing effect on the market for F,uropean
government securities.
1t Is too early to draw any conclu
sions regarding the recent f1uctua
tions in foreign currencies, as to
whether or not they really do denote
degree of stahiliZat not present
before. But the fact is that for nearly
q month French, Italian and Belgian n
rates have had only normal varla
tions. With the exception of the
Italian Ira there has not been much
of a rally. hut the liquidation that
went on in the Spring and early Sum
mer, especially in French and Belg1an n
fra ncs. has not recurred in nearly two
months. The Bank Of France was
able to renort during the week an
other substantial reduction in It's pa
per note issue.
Cotton Still Sagging.
Commodity markets continue To
await developments Of weather condl-
tions. Despite all that has been said
on the subject Of the lateness OF the
cotton crop and the consequent
liability to damage from frost. the cot
ton trade shows no uneasiness. The
market has not got over the StaCger
ing blow dealt by the last bureau re
port. which placed the probable crot
total much in excess of private
! estimates.
The weather news in the important
wheat growing sections of the
| Canadian and American Northwest
has been good. but it has made eX
port ers so slow. This is the season
Of the year when il is customary for
Europe to do its big buying of Amer
ican wheat. So far the foreign de-
mand at times has not been up to the
average.