The New York herald., 1921-05-24
FINANCIAL NEWS
AND COMMENT
Foreign Exchange in Sharp
Reaction-TobaccO and Cop
per Stocks Firm.

n SldIp TsdCllOu ut tASAdHbtS,
which had no complete explanation in
developments Of the day. was the out
standing feature OF yesterdays business
session. The drop of sterling and French
francs carried their quotations back 10
points lower tran had been seen since
April 27 in the case of the London rate
and since May IL for the rate in Paris.
In other words. the persistent advance
OF sterling during the month when the
German reparations question was in It's
most difficult stage and while an APP
parent fresh source OF European diff
Guilty was shaping over Sileslia. was
completely undone In a few hours of
trading. At 3s47s the days decline OF
sterling was more than cents and
francs recedcd considerably more than
half cent. All continental rates drew
back abruptly. weakness being nearly
as pronounced in lire and Belgian francs
as In Frencl quotations.
Presumably a great deal of specula-
tion had assisted the rise of exchange
In the last three weeks. and once de-
clining tendency developed yesterday
there were purried efforts TO convert
paper pronts into cash. But the flnan-
cial community was more interested in
the causes OF the slump than in its con-
current effects. News of riots in Egypt
may have Leen viewed as forecasting
further international difficulties In Eu-
rope, and reports of plans to send Brit
fish troops 10 help curb Polish forces in
Upper Slesla probably caused some
pressure on exchanges. In banking cir
cles, however, the retreat of quotations
was linked with establishment OF fresh
credits in the United States in connec-
ton with the initial German payments.
Germany viii turn over to the Allies
bills of exchange on many countries be-
fore June l. The selling yesterday
could be attributed partly to liquidation
of bills in direct process of transferring
funds from Berlin and also to sales
from London, Paris and other centres In
anticipation of the receipt of bills from
the German Government in the next
eight days. 1t is likely that the ex-
changes will be churned about consid-
month.
In the stock market the professional
spectators had things pretty much to
themselves. During the morning brisk
short covering movement carried indus
trial stocks / point to 2la points above
last Saturdays final figures and rails
were lifted more than a point in many
instances. Later came considerable un-
settlement caused by fresh pressure
against automobile stocks. The market
was much like that Of last week in that
consideration of current business
troubles was the chief material of
traders In attacking prices. General
Motors and Pierce-Arrow preferred re-
traders discussed dividend possibilities.
and Chandler and Studebaker were car
ried along for substantial recessions.
| The market was not, however, a one
sided affair. In late dealings, as tobaccos
were bid upward and coppers held up
firmly all the way along. II was a
picture OF what had happened frequently
this year, stocks tinged by known un-
ccrtainties in the next few months being
pushed back at the same time that
others whose unfavorable aspects have
become public property were firm. Busi-
ness was on a moderate scale. Call
money eased from z to 61R per cent. In
the afternoon. movement noteworthy
only because 1t came on the eve Of the
sale Of 500, 900. 900 French bonds.
That pending transaction, large even
in these days Of heavy financing, had
little If any effect on outstanding foreign
Government issues French per cent.
bonds of the issue of last September ad-
vanccd fraction over the opening
price. Nowhere was there sign OF un-
easiness in bonds over the fall of the
exchanges.
| May wheat advanced more than 2
cents bushel. Cotton receded slightly
under light trading.