The New York herald., 1921-02-02
FINANCIAL NEWS
AND COMMENT
Foreign Exchange Rates Re.
cover After Sharp Break
Stocks Move Down.

The foreign exchange market reflect
ed in bewildering fluctuations OF rates
yesterday a confusion OF opinion in Eu-
20 the German reparation situation.
Weakness Of sterling was pronounced in
London before the start of business here,
with the result that the rate declined
quickly from 3.sS% TO $50 for sight
drafts This was n reaction of Sh
! cents from the best quotation Of Janu-
airy o. when the market was rising
briskly because of hope that the allied
Commissioners in Paris would come to
an agreement likely to pave the way for
settlement of the indemnity problem.
The French rate moved back from 7
cents to $50 cents, and the initial
transaction reported in marks was at
152 cents, whence a decline occurred to
LA cents, the lowest quotation seen IN
more than three weeks. The final rate
on Monday afternoon was 1.57 cents.
Until noon the market continued un-
der much pressure. and the tendency of
quotations had effect in bringing about
reactions In the stock market Bonds
also were unsettled as well as cotton
and grain. But with the entrance into
later dealings the character of the ex-
changes changed. brisk recovery carry
ing sterling close to and francs and
marks above their final quotations Of the
day before. A fall OF the London rate
to the extent OF nearly cents and
day tells its own story of greatly mixed
sentiment over the reparation outlook,
which certainly was not brought to
more settled basis by the news des-
patches from Berlin. The German de-
scription of the terms as madness"
seems to forecast q difficult situation
for the political leaders of that country
should they propose to the people that
the programme be accepted even ten
tatively. The impression. however, that
further negotiations would be attempted
| by the German authorities with the pos
sibility of bringing about some ease
ment of conditions before a final an
swer must be given later in the month
was found In some banking circles here.
The American attitude toward the forty
two year plan of reparation payment
has been shown in rather general dis
approval of so heavy an indemnity, with
criticism Of the proposal for stiff tax
on German exports.
The stock market had an adverse
money situation to contend with as well
as the unsettlement resultant from the
early drop of the exchanges. BY the
same ttfen it may have been that the
rise of call loans to per cent. and
higher on Monday with a hard tone of
time funds yesterday morning acted to
depress exchange rates for a time. Call
money again got up 10 per cent. after
standing loans had been renewed at z
per cent. and "A substantial amount Of
loans was reported as called in during
requirements. The discount rates on
acceptances, which flrmed up on the day
| before, remained at the fractionally
higher levels. drawing Increased atten-
ton to the fact that the burden OF
much of the country's commercial fnan-
cling had become centred in New York.
The more extensive declines were In
| specialties, but some of the railroad.
petroleum. steel and automobile issues
declined more than q point. Business
was on small scale, which was signil-
cant of the current lack of bearlsh en-
deavor at time when material favor
able to their aspirations could easily
be found. 1t is probable that trading
opinion has subscribed to the belief that.
despite periods of firm rates. the tend
ency OF money Is lower and news from
the industries tells OF gradually improv-
ing operations in several directions
Wheat fell and cents in Chicago.
Cotton recovered partially after a re-
action of 40 to so points.