The New York herald., 1921-12-02
FINANCIAL NEWS
AND COMMENT
Exchanges Advance, Sterling
to Highest Since April, 1920
Stocks Strong.

Foreign exchanges occupied the centre
(of the financial stage yesterday. ex-
ceeding in importance several interest
Ing developments In stocks and crowd
Ing ~ one eide the economic sig
nifican. of the bond market Practi-
caiiy all l. ropean rates gained ground
rapidly from the start to the finish Of
1.-the days business. aided by urgent
short covering in sterling. francs and
marks Sterling got up to 4.oS. a gain
Of cents to the pound overnight and
the highest quotation, since April 1920.
The French rate rose to 7.37 cents
franc. recovering oil distance lost dur
Ing the last three weeks. and marks
were reported as high as 80 cent each.
The last named rate was almost twice
the minimum price Of the year. estab-
ished early last month. Lire and Bel
gian francs were buoyant
Undoubtedly that powerful forward
swing reflected the market effect of
news that British financial leaders were
considering some plan for postponing
further payments Of German repara-
tions. But another force behind the
rise was further news Of plans for an
international conference to discusa
means to stabilize exchange. to be par
ticipated In by the United States. Just
how those problems will be attacked IL
decidedly obscure. II Is difficult to see
how any real stnbillzation Of foreign
currencies in outside markets can be
irrived at except through normal ex-
pansion OF trade or through gold loans.
the accumulation Of the metal for ma
lons; reserve behind currency issues be-
In hoardings and commercial products
or on holdings of countries which can
spare 1t from their own reserves. The
.ietails of plans In embryo will develop
In due time. Yesterdays upturn Of
rates was caused more by expectations
than by actual events.
The stock market felt the influence
Of the rising exchanged. but It was
noticeable that its dealings fell away In
volume as compared with the large
fndTkck3 Oh lLlc last thAtuCT
strangely. railroad shares made only
light reflection OF the eiltabiishment of
railway working rules. which will help
materially In reducing wage outiays.
The indication that the settlement OF
this troublesome problem also pSves the
way for early cons Iteration OF direct
wage cuts was lost In the markets nc-
tion, although Its reflection Is likely to
come later. Prior to the declaration of
the $50 share dividend on Burlington
stock. Northern Pacific went forward to
a new high level for the current move
ment and Great Northern preferred was
strong. But afterward It looked as
though the declaration. large as II was
and of much value In Northern Pacific
and Great Northern dividend matters.
was disappointing to spectators as the
shares of the latter two roads ended the
day with bare fractional gains.
The Industrial share list disclosed few
points of weakness and railroad equip
ment, oil and a number Of steel issues
gained a point and more. In the bond
market feature was rather sharp
reaction Of French 7hs to ". with
subsequent recovery. which seemed to
record a disturbed feeling In some quar-
ters over the French budget position In
case reparations payments should be
postponed.
The weeks rise of the Federal Re-
serve ratio OF cash to deposit and note
liabilities to a new high point--72.7 per
cent.-vas caused by a gain OF slo.-
soc, 900 In reserve and fall Of $685.
900, 900 In circulating Reserve notes.
which overcame an increase OF sl4,-
soO. 900 In deposits. The gold cover for
notes In circulation. after setting aside
s5 per cent against deposit Liabilities.
went above 100 cents to the dollar for
the nrst time this year.