Evening star., 1921-05-27
GERMANS TURNING
MONEY TO DOLLARS
Big Slump in Exchange.
Stocks Are Again on
Down Grade.
BY STUART r. WEST.

NEW YORK. May c1.-Thc incl
dent Of the day in the financial mar
kets was further and still more vio-
lent fall in sterling exchange. At one
time sight drafts on London were
quoted below '$ss7. This was loss
Of cents from last night. OF over IS
cents from last weeks high, and it
meant the undoinS- Of nearly the en-
tire gain from the first of January.
The break in francs was scarcely less
violent, while German marks were of
more than half the amount of their
recent recovery.
sponsible. in part. for the collapse.
In no other quarter have speculative
operations for the rise been conduct
ed during the last few months the
way they have in the exchange
market. and the position was even
tually reached where a sharp recoil
was inevitable on the first unfavor-
able development.
But speculative eXcesses are only
one and not the major aspect Of this
weeks break in sterling aud francs.
The principal explanation. as has
along. is that Germany has been con-
vtrting its credit wherever available
into American dollars. which are the
medium fixed upon for the first in
Stal!ment of the reparations payment.
AS time for this payment is up
holiday will intervene at New York.
the pressure to convert sterling.
francs and other European currencies
into American money became today
so urgent that it temporarily over
came the larger influences in the sit
for the last FIVE months. In other
words. today's collapse was an OBJ
viously temporary setback due to
transitory cause. and in no way in
valids ting the factors in the inter-
national trade and credit situation
in the exchanges since the middle Of
December.
The steel situation.
The sensational, happenings in the
exchange market had an unsettling
effect upon the share list.
Again the weakness in stocks could
have been referred altogether to un
favorable trade news. actual or antfci-
pated. and to the prospect OF further
heavily sold on intimatiors that va
rious companies which have not Yet
reduced the price OF their cars VIII
soon be out With revised schedules.
the purpose being admittedly to stim-
ulnte business.
Judge Gary's remarks before the
Steel Institute. while decidedly hope
full for the longer outlook were con-
strued as suggesting that the steel
trade would have to reduce prices still
further before it was through with
It's adjustment.
On this Steel common was heavily
sold. and the entire steel group car
ried downwafd.. .-~..'-.-
The oils were comparatively steady.
and so were most Of the rails. the lat
ter still supported by the excellent
showing in the April profit staten ents
and by the expectation that the wage
cot to be announced next Wednesday
will be reasonably satisfactory for
the majority Of the roads. But partly
owing to the usual desire TO be clear
over the holiday. and partly because
Of the weakness in special quarters.
stocks which al various times in the
last week or so have been quite
strong. underwent something of re-
action.
International .Harvester. $500
International Harvester continued
to be reactionary on fresh reports that
adverse dividend action wo,'d be +aser
at the next meeting Of the board OF
directors. It has been pointed out
several times that Harvf fs'"- ''"" s"N-
fered severely in the recent business
depression and has b. -.
close down some OF it's plants. 1t also
is loaded UP with inventories at high
prices. and as yet has not been in a
position to dispose of any Of these
goods.