The New York herald., 1921-08-09
FINANCIAL NEWS
AND COMMENT
Advance in Sterling Laid
Partly to Short Selling
Stocks without Feature.

An abrupt ADVANCE OF more tndn IL
cents In the quotation OF the pound ster-
ling, accompanied by sharp gains in
other European exchanges. showed In
rather extravagant fashion yesterday
the extent to which international cur
rencies have passed from the control of
normal influences. In response to big
advance at London. sterling led off here
with an over Sunday upturn of Al
day indicated that bidders were step
ping on one another's toes to get the
rather meagre offerings.
Bankers reported that most of the
The highest quotation for sterling dur
ing market hours indicated that all the
ground lost since July 8, when the rate
was 36s&. had been retraced, the re-
covery from the lowest point of the sum-
mer being approximately Is cents to the
pound.
The market acted as though two In
fluences were overshadowing those Of
rather strangely, could be included fluc-
tuations induced directly by commercial
transactions. The belief prevailed In
trading quarters that transfers OF funds
from New York to London for the ac-
count of the Reparations Commission
started rates upward, and this caused a
heavy flow of purchases to retire short
contracts. The buying by individuals
who lately pushed sterling lower day
after day through short sales. believing
that Germany's payments of indemnity
had laid blight upon the market, was
evidently tho most prominent force In
the days business.
While transactions connected with
reparations payments have not always
been traceable. knowledge that the Ger
man Government has substantial bal
ances at New York lends plausibility to
the suggestion that these were drawn
down through sales Of dollars In Lon
don. causing sterling to rise. The other
exchanges OF Western Europe and the
German rate have been wont to move
rapidly with sterling ever since repara-
tion payments became a real factor In
the market
In connection with the transfer OF
| funds to London, 1t is possible that
reparation money on deposit with the
Federal Reserve Bank for account OF
the Bank OF England In behalf OF the
commission may have been sent to Lon
don. although no information on this
point was obtainable.
The stock market consisted entirely
Of such fluctuations as sluggish pro-
fessional operations cause at times when
no especial influences are at work
among prices. Railroad equipment
shares. led by American Locomotive.
were firm at times. Some rail Issues
worked slightly lower. others were firmer
than on Saturday. and there was an
irregular tendency elsewhere. which
meant nothing.
Call money stayed rather firmly at
6 per cent, although offerings were
reported more than equal to tho de-
mand in tho afternoon. suggesting that
the rate might ease or In day or
two.
The bond market slowed down and
quotations were no more than steady,
some prominent issues turning soft.
The hardening tone of money rates In
the last six days has had an effect
upon bonds and, doubtless. the possi-
bility Of ono or two sizable foreign
offerings In the near future has checked
the upward movement.
A good demand was reported for tho
s7.5oo.0o0 Republic of Uruguay per
cents. which were put before the pub
lie yesterday morning. and the Street
made preparations for a contemplated
issue OF $50, ,ooo.O Argentine two year
notes.
Cotton quotations receded Is to 20
points under realizing sales. Wheat
futures gained 21a cents at Chicago,
speculation being directed partly by
thought of the Government report. due
this afternoon, which Is expected In the
trade to disclose deterioration OF grain
during July.