The New York herald., 1921-12-12
FINANCIAL NEWS
AND COMMENT
Foreign Exchanges Pick Up
and Sterling Hits High
for This Year.
STOCKS ARE APATHETIC
Bonds Tend to Be Easier
Tone of Cotton Fairly Firm
Grain Erratic.
STOCKS ARE APATHETIC

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Such "a demonstration of strength in
foreign exchanges as was seen last week
arouses the thought that something more
than market exhilaration over contem-
plated readjustments of German repara-
tons and the near solution of the Irish
question directed part of the buying
orders. Sterling at its best quotation
was 6l cents a pound more than its rate
on the first day OF this year. French
francs were nearly cents higher. Swiss
francs. which crossed par. were more
than cents higher. and the Swedish
krone displayed as much OF a recovery
as did Swiss currency. Sterling, more
over. rose nearly IA cents, and French
francs q of cent in eight days.
The foreign exchange market has con-
tanned at no time in the last month a
really substantial supply OF bills. Ex-
ports of cotton and grain. the bulwark
Of the autumn export movement, were
large during the early weeks Of autumn,
but receded afterward. Banking COM
ment shows that a considerable portion
of the trade with outside countries, es-
pecially those the exchanges of which
are much deprecated. has been financed
on a scale larger, perhaps proportion
ately. than It was in many years of nor
NAL conditions through private credits,
thus tending to check the creation OF
exchange. AS exports to Europe have
been restricted and the output Of bills
rather moderate. 1t might be reasoned
that the speeding up Of short covering
purchases because Of the changing repa-
rations situation had been the principal
force behind the upturn of rates.
Effect OF Heparations Plans.
Unquestionably many such transac-
tions have gone on. The effect OF repara-
tons plans on sentiment, meagre as was
the news. was of a sort to cause specu-
lators TO shorten sail. But 1t was evil
dent In some well informed banking
quarters that, with due allowance for
surface events IN the market. the pre-
vailing belief was favorable changes in
the European financial situation were
being reflected In exchange rates.
In the absence Of complete informa-
tion. It Is fairly safe to infer that one
element aiding the exchanges was the
impression that trade between England,
France and neutral countries with Ger
many was to be loosened up, so to speak.
soon. The dispatches from London and
Paris have made clear that the ques-
the financing OF German purchases Of
raw material was a primary subject In
last weeks discussion between Lloyd
George, Rathenau and bankers. Whether
or not a reopening Of trade channels
and an effort to expand commercial in
tercourse would entail q revision Of
reparations terms cannot be determined
with certainty. but the financial COM
munity on this side Of the water
gathered that Germany would obtain
postponement in the payment of cash In
the future, or a way would be found
to uquidate much OF the debt IN goods.
AS the arrangement exists by January
Is the German Government must turn
in to the Reparations Commission 500.-
900. 600 gold marks. and there normally
would be another large amount due
early in the spring on account OF export
tax inlposts.