Evening star., 1921-08-08
SHARP GAIN MADE
/. IN STERLING RATES
Rise, Unaccounted For, Sur
prises street-stocks Are
Decidedly Slow, Easy.
BY STUART P. WEST.

NEW YORK, August S-The one out
standing incident in today's financial
market was a further and still more vio-
lent upturn in sterling exchange. AT the
high Of the day rates were up fully Is
cents on the pound from the low of two
weeks ago; rates were up II cents as
compared with the middle of last week
An advance so substantial as this would
have seemed to have cause for come
definite explanation other than mere
market huctuatioH But if there was any
important development impending in in
ternational finance the secret was care
fully guarded in banking quarters today.
Even l5-cent advance in sterling
might easily be simply the rebound
naturally to be expected after a down.
ward movement which had carried
two months. Emphasis once again
has been laid upon the part which
speculation has played in this seasons
exchange market.
The rise in sterling to the 81 mark
was plainly exaggerated by specula-
tive operations and it is altogether
likely that the subsequent drop from
1884 was similarly overdone as the
result of short selling. The exchange
market acted today as 1t would logic
ally have done, with a heavy, un-
covered short interest suddenly shut
or from its accustomed sources of
supply.
Discuss Causes.
But while market conditions thus
offered a reasonable enough explana-
ton for the jump in sterling and the
rates. there was some discussion as to
possible outside causes at work as
we'll That there has been any abrupt
change in the relation of merchandise
exports and imports is out of the
question. That the reason lies in an
increase of gold transfer to this coun-
try is inconceivable, inasmuch as
Europe has for six months been
scraping the markets of the world
for every dollar of free gold avail
able for shipment here.
This leaves. as the only possible ex-
pianation-if the jump in exchange rate
is due to something else besides an
oversold speculative market-some fresh
turn in the operations incident to Ger
man reparations payment of some pend
ing development connected with the
funding of Europes debt to us which
would be helpful to Europe's credit.
Little Interest in Stocks.
There was very little to the stock
market of the day. 1t was a series of
petty ups and downs among particular
stocks brought about by the activities
of the professionals.
Sugar stocks were weak for a while,
ostensibly because improvement had
made no further headway in the sugar
trade, some of the oils were driven
down, and the tobaccos were sold on the
possibility that the new revenue raising
Dill would contain an increase in the
tax on cigarettes so steep that it could
not readily be passed on to the con-
sumner.
On the other hand, American Lo-
comotive was bought on the prospect
of a favorable semi-annual report to-
morrow and the rest of the equip
ments and steel shares were steady.
Railway stocks, after an early de-
cline. rallied in anticipation that IA
Vorable action would be taken this
week by the Senate finance committee,
which has the railway relief measure
before it.
American Locomotive.
Buying of American Locomotive
was based on the expectation of a
favorable report for the six months
ending June 80, which will be issued
tomorrow. 1t was published here on
Saturday that the full years dividend
at the rate of per cent would be
shown covered twice over by the prof
it's of the half year. This is better
than was figured on up to short
while ago. The only question is
whether the market will pay more
attention to the earnings of the past
six months or to the outlook for the
current half year which is not as
good.
With American Locomotive, as with
all the other equipments. orders on
hand are small and there is little
fresh booking. Everything depends
upon the governments measures for
relieving the railroads and when
these will be passed and put into ef-
feet Other equipment stocks were
not much affected by the strength in
American Locomotive. with the ex-
ception of Haskell & Barker, when
jumped rather sharply. The dividend
on this stock at the rate of 4 per cent
is regarded as safe.