The New York herald., 1922-12-07
FINANCIAL NEWS
AND COMMENT
Stocks Advance as High as Z
Points-Rout Of Bear In
terest Complete.


the stock market yesterday afternoon
was complete. Stocks advanced from
fractions to six and seven points. the
extreme gains being registered by
Mexican Petroleum. Studebaksr. Pan
American and one or two others.
Although there were some important
news developments which could be
connected with the advance, It's vfo-
lence could be attributed only to the
short covering which these news devel-
opments and pool operations inspired.
With the market in a more or less
oversoid condition. II was comparatively
easy for operators on the constructive
side to start a rally of sufficient pro-
portions to badly frighten the shorts
AS a matter of fact. the way In which
trading flattened out during the early
hours Of yesterdays session when ham
mering tactics were being used in an
effort to depress the general List In
dicated pretty clearly that the resist
ance to attack was sufficiently great to
forecast sharp recovery. 1t was al
most entirely a professional movement
based largely on technical considera-
tons.
Publication Of Secretary MELONS, ex-
tremely welcome remarks on taxation
started the rally in stocks When
stocks had been sold without favor for
several weeks on the theory that new
and burdensone tax legislation was inn
pending 1T was not at all surprising that
an upward reaction should follow the
reassuring statements of the Secretary
OF the Treasury. While Mr.. Mellon OF
course cannot speak for the lawmakers
Of the nation and cannot guarantee that
they will not adopt new tax measures
which might deter business and indus
try. his assertion that new taxation is
unnecessary Is very important. In the
first place. 1t is not the custom OF Con-
gress to go ahead with matters Of rais-
ing new revenues through taxation
without at least some indication from
the executive branch that they are
needed.
On the other hand. Mr.. Melons sug-
gestions In relation to the reduction OF
surtaxes were perhaps of less Import
ance, for that is matter which is
solely within the province of tho legis-
1ative branch. With large reactionary
element in he new Congress It is quite
possible that his suggestions In that
respect would be disregarded. even
though Congress did not feel ready to
increase taxes without his signal. The
Secretary's review Of business oondi-
tions and the picture he painted of pres
ent Industrial activity were exceedingly
gratifying to read. but II Is very doubt
full II they had much influence market
wise, for they were largely matters OF
history
Sterling exchange continued its up-
ward swing. making another new nigh
mark for al.cesSt four years above ASS
which is within about 80 cents OF III
parity. At the same time Swiss francs
were less than half cent below parity
and exchange on Amsterdam went to q
little more than one-tenth of q cent Of
parity. French francs did better, too.
| In the commodity markets there wa.
substantial activity and both cotton ans
grain prices reacted upward after tn,
declines OF Tuesday. December whea
rose about a cent a bushel despite earl,
weakness attributed generally to pres
sure In the Liverpool market. Cotto,
recovered part Of tho preceding day.
losses. largely on realizing sales from
tho short side.
Although the terms of the rev Gov
ernment hnan'[ * were not officially an
nounced until this morning they wer
pretty we'll forecast in the financial dis
trict. There was quite a difference /,
the construction put on them in differ
ent quarters. This was especially tru
with reference to the two and a hal
year Treasury notes at Az per cent
which many were inclined to feel wa
excessive as to rate. With the eycep
ton OF Libertys, which were Arm. tn
Investment market yesterday was NOR
or less under pressure. probably I'm re
nection OF the new Government fnanc
ing.