The New York herald., 1921-12-19
FINANCIAL NEWS
AND COMMENT
Rise of Exchanges, Successful
City Bond Sale and Merger
Plans Aid Markets.
OUTLOOK is ENCOURAGING
Industrials Strong at Periods
in Which Metals and Oils
Touch Years Highs.
OUTLOOK is ENCOURAGING

The three primary forces which in.
creased the impression last week tha.
1922 would be more satisfactory yea,
| for business than 1921 has been wer,
the rise of sterling exchange to a point
II cents pound higher than it was in
the first week of January and decided
recovery of other Western European ex.
changes; the evidence supplied in the
sale of s55.Ooo,Ooo of the city of New
York's bonds of vast amount of funds
in the market for investment at low
rates. and the known plans and reported
movements for the consolidation of in.
dustrial corporations into large units
None of them, of course, predicted tha,
an expansion of manufacturing and
trade could be looked for immedi-
ately after January /. The handicaps
in che way of business readjustment are
too well known to permit of any such ex-
pectation, but the events mentioned were
clearly sign posts on the road to better
business conditions.
The probability of several industrial
mergers early IN the new year has been
the subject of more and more study in
financial circles in the last month. The
fact has been established that several
steel companies are seeking TO unite, and
the bases for two or three more consol-
idations in other fields have been formed
through purchase Of stock control. In
the light Of the business outlook it may
be assumed that only the start has been
made in the union Of corporations, as the
time is coming when profits will be most
satisfactory for concerns able to keep
their costs at the lowest possible levels
and in positions to center heavy outputs
on particular points in the markets at
home and abroad.
Joint Operation Cuts Overhead.
1t is automatic if three steel compa-
ries which separately produces an ag-
gregate OF 100000 tons of ingots a year
can be operated jointly with closer and
more compact organization the overhead
expenses in making that total of ingots
will no to n. tlat 81,
ability of single selling organization to
handle the finished goods made from
the 100000 tons of ingots would re-
suit in a more effective opposition to
competition considering activities in
foreign markets primarily than would
be the case If three organizations were
seeking to sell the steel.
The copper industry is evidently con-
sidering merger plans from an angie
slightly different from that of the inde-
pendent steel makers. The Anaconda
Copper Mining Company's bid for control
of the American Brass Company dis
closes the urge that has arisen out of
the stagnation of the last two years to
pass raw material from the ground di-
rectly through refinery and mills under
a single management, eliminating the
middle man and reducing the overheads
now entailed in the separate tasks of
producing metal and manufacturing
brass and copper goods. The possibility
of consolidation of copper mining and
refining corporations. however, is receiv-
ing attention, and the same situatioa
prevails in the petroleum and automobile
industries. The directing influence be-
hind merger plans in all the fields is the
same-the need to cut costs and perfect
organizations before business revives to
a point where severe competition arises
in the world markets.
Merger Talk Market Factor.
The expectation of mergers undoubted-
ly was distinct factor in last week 8
market for industrial company shares.
In fact, It was largely the effort OF specu-
lators to select issues likely to profit
through consultations that impaired a
strong tone to prices at times, resulting
in new high records for the year in sew
eral metal and oil stocks. At the saric
time an expression of Improvement in
international financial conditions. con-
tanned in the strength of foreign ex-
changes, was disclosed in stocks and
there was also natural support tc
quotations in the threefold subscrip.
tion to the city OF New York bonds
Altogether, foreign exchanges and bonds
and stocks to q lesser degree were more
interesting than they were in most ol
the preceding weeks Of the summer and
autumn, especially in their relation e
fundamental conditions of business and
trade.
IT would be well. however. to be some
what cautious about the exchanges as
the sharp upturn early in the week ano
the fair degree Of stability thereafter
wero not directed entirely by improve