The New York herald., 1922-10-25
FINANCIAL NEWS
AND COMMENT
Foreign Exchange and Foreign
Bonds Weak, Rejecting
Troubles Abroad.

change rates and In foreign bonds fea-
tured yesterdays dealings In the finan-
cial district. Francs continued to fall
made a new low price at just slightly
above cents. At the same time Ger
man marks again established a new low
record. declining to 2s hundredths Of a
cent.
The movement in exchange rates DIFF
fered from some OF the other declines
in the last few days In that British
rates also suffered sharp setback. Up
to the end of last week sterling had
held fairly strong in the face Of the de-
cline In marks and francs. experiencing
only a brief moment >of real weakness
on the day Lloyd Georges resignation
was announced.
Several factors were visible behind
the exchange decline. In the case of
the French rate the huge deficit which
Che nation will face In its budget is the
principal cause of the break. Inter-
national bankers at this time can see
| no hope for immediate Improvement In
| that direction. Coupled with this situa-
| ton was the plain threat from Berlin
yesterday that the Government would
acknowledge bankruptcy. with probable
| Reputation of all obligations. The
budget deficit IS scheduled to be we'll
| discussed at the coming session of the
| Chamber of Deputies and II Is not at all
| unlikely that heavy selling OF francs In
recent days has been IN anticipation Of
political disturbance.
The possibility of German bankruptcy
| also bore heavily on sterling rates. 1t
Is probable, however, that the unsettle-
ment of British rates can be attributed
more to the uncertainties of the COM
! ing general election than anything else.
! Whispers in Wall Street Of the possible
success OF a Labor campaign did not
! help matters any. So far as Germany's
situation at this time is concerned, 1t Is
becoming increasingly apparent that
something further must be done In the
way of modification Of the reparatons
terms before any really constructive
strides can be taken in European finan-
| cial affairs.
| The weakness in foreign exchange
spread to foreign bonds. which sold of
sharply during the day. At the same
time other bonds particularly the specu-
lative railroad issues, were under heavy
pressure Liberty bonds lost from two
to more than thirty cents. the single
exception being the tax exempt 3has
which advanced slightly.
| Stock movements were again chiefly
characterized by their irregularity. After
| the close of yesterdays session Wall
| Street obviously was puzzled by the
action of stocks. AS In several preced-
| ing days certain issues advanced while
others sustained severe decline. There
seemed to be no uniformity of trend.
] although II can be said that the majority
| Of stocks yesterday were decidedly weak.
A sharp rally in the late trading brought
the general list sufficiently above the
lows of the day to temper somewhat the
feeling Of gloom adopted by traders as
| a class.
A peculiar situation exists with rela-
| ton Nto stocks. Undoubtedly business
| has taken enormous strides, and 1t is
not by any means through yet Day to
| day reports indicate increasing improve
ment. Equally certain 1t is that the
movement In the market over many
months has been a process of discount
ing the business improvement. The
market has advanced more or less
steadily for close to fourteen months
and the averages, at least of industrial
stocks. are far above the lows of last
year. But the action of the market
| lately has caused traders TO pause and
ask the question, HAS the discounting
/ process been entirely compile sed?" And
] so far this question has not been salts
| factorily answered. The market seems
to have reached the point where time
alone can solve the problem, and In the
meantime the public seems to be holding
back because of the uncertainty.
1 A notable feature of yesterdays mar
kets was another sharp advance in cot
ton. Both spot cotton and the December
option sold above "a cents. new high
record over a period of a good many
i months.