The New York herald., 1922-12-16
FINANCIAL NEWS
AND COMMENT
Vast Improvement. Here and
Abroad Forecast on Basis
of German Loan Plan.

II was natural that the news from
Washington relating to possible huge
gold loan to Germany and to other very
important international economic devel-
opments should occupy the attention of
the financial district yesterday to the alb
else. In this news was supplied part
of the answer to the question of what
has been happening in the foreign ex-
change market. At the same time it fur
nshed the basis for predictions of vast
Improvement at home and abroad and Of
consequent prosperity on every hand.
Except in the cases of bankers who
have for months been studying the for
eign economic question, there was an
inclination to accept the readjustment
of European affairs as thing virtually
accomplished. This. of course, was a
mistake. A scrutiny of the situation as
tion that there are innumerable points
to be Strengthened out before any con-
crete steps can be taken in the direction
indicated in the Washington dispatches.
That these advices were so obviously in
spired, however. gave them much
greater weight. 1t was felt pretty gem
orally that the suggestion contained in
the news was that, Notwithstanding the
big obstacles, official Washington must
feel that there is some ground for be-
lieving they can be overcome.
In the first place. there is the ques
tion of reparations. 1t is admitted on
every hand-except by France-that
very material modification of the repa-
rations terms must be made. In the
words of one eminent international
banker. Germany must be asked to pay
what she says she can and will pay 1t
is useless to continue demanding of
Germany payment which it Is absolutely
impossible for her to make. At the same
time a moratorium must be arranged.
Germany cannot continue expending
huge sums for coal, &C.. for shipment to
France each month as she is now COM
PEELED to do In the third place. French
occupation of German territory will have
to cease, not Oily because of the great
expense it imposes on the bankrupt ma
on the part of officials in the occupied
regions to discriminate against German
goods.
Last but not least by any means is
a determination of how any money sup
piled by loan shall be expended. A
very substantial portion of such FUNDS
must go directly toward the reconstruc-
tion of Germany and not into the French
Treasury on account of reparations and
claims.
The German loan talk supplied ample
for constructive opera
ton in the stock market, especially in
the steel and copper shares. on the
theory that these commodities are the
which would be most heavily bought In
the event money was supplied that ma
ton The general market was buoyant
in the early trading, but aside from
those issues, in which special influences
were at work-notably United states
Steel. on which there VAS talk of huge
extra cash or Liberty bond dividend
the tendency later in the day was some
what lower The general tone OF the
market, however, was one OF frmness
and the buying appeared to be OF very
substantial character.
The commodity and foreign exchange
markets reacted somewhat from the
highs of preceding days. French francs
were an exception, as also were German
marks. both advancing substantially.
The recent consecutive advances in
grain have been of such proportions and
SO we'll sustained that 1t was not sur
prising a sharp reaction should ensue.
Activity in the bond market slumped
sharply after Thursdays heavy trading.
Liberty bonds were in supply at some
what lower figures, but several OF the
leading railroad issues showed real
strength. Call money moved up from
4 10 ner cent.