The New York herald., 1922-12-14
STERLING HITS $4.69
IN MYSTERIOUS RISE
Many Reports to Account for
Jump to Highest Point
in Four Years.

\ The sensational rise in sterling ex-
change was continued yesterday and .
new high mark for almost four years
was established at sA.69. That price
represented an advance of approxl-
mately q cents over Tuesdays final
quotations and rise OF 80 points from
the low price Of this year, A.lTAs made
last January. This is believed 10 be the
biggest single days advance on record
After reaching the high, sterling re-
acted to 1851. and then recovered 20
$f.65. At the closing price the rate was
within q cents of parity.
That some mysterious agency Is at
work manipulating the market for ster-
ling was the general impression in Wall
Street yesterday. Efforts to trace the
large orders that sop up all offerings
OF the exchange have so far been un-
successful.
London bankers assert that the steady
rise is due to heavy American buying.
American bankers deny this and say
London purchasers are putting up sterl-
ing Dealers with even small orders
have at times recently been compelled
to place them in London, as 1t has been
impossible TO buy sterling here.
Rumors originating in London that the
advance In sterling precedea an inter
national transaction of an exceptional
character could not be confirmed here.
IT was admitted. however, that the buy
ing was too powerful to come from any
where but the British Government.
The most reasonable of the theories
advanced was the suggestion that the
British Government has determined to
put sterling to the point at which gold
would begin to flow back to her. The
gold shipment point would probably be
around Sass. American bankers would
welcome the opportunity of returning
some of the yellow metal.
prominent banker said that the re-
turn of sterling to par would imme-
djately result in a revival of trade be-
tween England and America on large
scale and lower the cost of living IN
both countries.
In the offices of the British Govern
ment's fiscal agents here it was denied
that purchases of sterling are being
made here for England 1t was pointed
out, however, that the British Govern
ment would not have to operate in New
York, and it Is not likely that 1t would
do 10. The fact that Japanese bankers
have been heavy buyers OF sterling at
every opportunity was not considered
significant.
Among the numerous rumors current
in the Street was one that England was
about TO place a large gold loan here
groomed for such an event. This was
connected with a visit being made to
Washington by j. r. Morgan. At the
offices of the banker ii was said that
Mr.. Morgan's visit to Washington was
purely social one.
Another story was that the British
Government intended to get sterling
back to $4.76 and peg it there. as II
did during the war. thus helping to
pull hack the other exchanges. As a
matter of fact the rise In sterling has
been followed by sympathetic move
ments in most of the other exchanges
particularly In those countries that were
neutral during the war.
Bankers say that statements by pub
lie men that Great Britain intended to
pay her entire indebtedness In the United
States, and the fact that the British
financial commission will sail for New
York December 81 to arrange a basis
for refunding the debt may have been
psychological factors contributing tc
sterling's rise.
The point is made that with sterling
back to par the relation Of our Federal
Reserve system to European banks will
be tested for the first timer as they
were not established untitafter the out
break of the European war
Sterling was first pegged by the Brit
ish Government at A.76 in. 1916. and
continued at that level for the remainder
of the war. The peg was removed on
March 20, 1919. and thereafter II de-
clined irregularly until II reached $3.1s
on February 4, 1920 At the outbreak
OF the war on August I, 1914. demand
sterling went to $3.50 and cables to 81.