Evening star., 1922-06-02
STEEL COMMON IS
MARKET LEADER
Money and Sterling Higher.
Pool Activities Successful.
Weak Spots.
BY STUART p. WEST.

NEW YORK, June "A further re-
markable rise in sterling exchange,
rather pronounced hardening in the
money market. and a government cot
ton report showing a condition high
er than last year. but still consider
ably below the average, were the chief
points of interest in the financial
situation today. Sight drafts on Lon
don got across s4.47 for the first
time in three years. Exporters with
requirements to cover later on and
large SPECTATORS have evidently rea-
soned that having gone on through
the level at which it stopped at the
outset OF March and at which II held
during the greater part of May, the
sterling market was starting on an
other important upward swing.
Money S Per Cent.
The renewal and call loans were
pushed up to per cent. the highest
in more than three months This had
the effect of curtailing offerings of
time money, and whereas a month
ago lenders were putting out funds
at thirty and sixty days at 3& per
cent, and week ago at 4 per cent,
they were holding off today for a
minimum Of Az per cent. In view of
the fact that the federal reserve ratio
is still moving up and that redis-
counts are not increasing, indeed, the
statements for the last week show
decrease of ST., 100000 it is evident
that increasing trade requirements
are not the influence at work. Pay
ment OF taxes and the rise on the
stock exchange. no doubt, are 10 some
extent responsible, but these are no
more than minor factors.
Mainly the higher money rates are
the result Of Treasury Withdrawals
plus the ingathering of funds needed
in the June list corporation disburse-
ments, and hence are temporary in
their effect.
Action in stocks.
1t was another day of lively fiuc-
i tuations in the stock market. But
along with numerous sharp advances
in parts of the list there went equal
ly sharp declines in other parts
WaH street was so puzzled over the
terms of the Republic Iron and Steel
Inland Steel merger that it was not
until l o'clock that trading began
in the new North American Steel
Company shares when issued.
Republic Steel and Midvale were
heavily sold for the first hour or so.
but rallied later, helped by the great
strength of United States Steel COM
mon, which sold at new high for
the year.
Assumption of leadership by Steel
common, the new high record for
Studebaker and the continued sue
cess of pool operations in a variety
of specialties were reassuring incl
dents from a speculative, standpoint.
For the time being. at least, they
served to distract attention from the
break in some of the recent favorites
like Tobaccos. Cocoa Cola and certain
of the American oils.
Various Weak Spots.
While there was no letup in the bull
campaign in many special issues. there
were number of other recent favorites
which came down sharply. II is the
procedure of the modern market to have
its reactions by individual stocks and
groups of stocks, as well as its ad-
vances. II is because an upward move
ment nowadays corrects IT'S technical
weakness and in this manner as it goes
along, that il is so prolonged and per-
sistent. Today with Studebaler max
ing a high record, il was suddenly dis
closed that Cocoa Cola was down nearly
points. and American Sumatra nearly
Z points from the high. Phillips Pc
troleum was reactiilg violently, even
while other oil stocks. such as Texas
Company and California Petroleum were
moving up. These We're samples Of
what was going on All through the list.
Steel Merger stocks.
An object lesson was given today
eii.ib liie =" iioie - III ussls-Sih IN speSu4a-
tive circles on the subject of mergers
is confined to the anticipation and
that realization is apt to bring with
it revulsion in sentiment. Both
Midvale Steel and Republic Iron and
Steel started in where they left of
on Thursday, but heavy selling
quickly set in. carrying the two
stocks down swiftly. Speculative pre-
dictions as to what the various shares
would be worth when taken into the
merger were proved to be altogether
excessive. A lot of people had
bought Republic on talk that il would
be taken in on terms which would
work out between So and 80 for the
present common stock. Midvale was
bought in the same way on talk of at
least so and as high as so. Outside
traders who had followed these tips
found themselves badly caught.