Evening star. [volume] (Washington, D.C.) 1854-1972, 1922-10-17
FURTHER RECOVERY
MADE IN STERLING
PuzzIing Market Variations
Due in Part to Weakness
in Liberty Bonds.
BY STUART p. WEST.

By Special Leased Wire to The Star.
NEW YORK. October 17.-Further
recovery in sterling exchange. re-
newed weakness in liberty bonds and
a series of puzzling variations in the
stock market were the principal hap
penines in the financial situation to-
dav.
Above $444 sterling stood at its
highest since midsummer. Although
still off Z cents In the pound from the
top of last June. it was up almost
exactly a corresponding amount from
the September low. Just when sales
of sterling to create dollar creoit
available for the first payment OH
Great Britains war debt were COM
pleted is something that mas hoe
been divulged.
But the general understanding IS
that they were in progress during the
three months of the middle OF June
to the middle of September, when
sterling rates were coming down.
that thew ceased not quite a month
ago and that the recovery in exchange
since then has been the natural eX-
preston of the markets relief.
Trading in New U. 8. Bonds.
Trading in the new United States
AXIS of 1852 began on the stock ex-
change, with most of the transactions
either at OF a trif1e above par. Al
the same time selling of the liHer-
ties on a rather large scale persisted.
Undoubtedly there has been certain
amount of swapping of the older gov
eminent loans for the new by invest
ment interests preferring the longer
term security
But this sort of selling has scarcely
ence In the recent decline In the lor-
mer.
That the weakness in liberties as
we'll as the arrest in the upward
movement in the bond market gener-
ally is incidental to the greater de-
mand for funds for business use. may
he taken as virtually certain.
The banks have for some time been
reducing their holdings OF liberties
and other securities to meet the In
creased demands of their commercial
customers. and this liquidation seems
to have been particularly heavy dur
ing the last week.
Outside of the Mexican oils. few
Of the railway shares and Some pool
specialties. less interest was display
ed In proceedings on the stock ex-
change Take the general list. prices
moved with considerable indecision.
OIL Fireworks Explained.
can oils appeared to have something
more behind it than mere professional
manipulation. The story of spe-
cial distribution on Pan-American
stocks was first heard nearly week
ago and it has impressed the street
desire of the controlling interests to
induce the minority holders of Mexi-
can Petroleum to convert their stock
into the Pan-American b shares. OF
fers to exchange at various ratios the
one stock for the other have not ac-
holders of Pan-American were
promised an extra dividend, which
holders of Mexican Petroleum would
not get unless they turned in their
stocks. the end in view might be
achieved.
The trading on the stock exchange
began with the violent run-up In
Mexican Petroleum and Pan-Ameri-
can. The jump in the Mexican oils led
to some hurried covering in other oil
shares.
Heavy Selling In Steel.
The cold water thrown by the chair
man of the Steel Corporation upon
common brought selling into these
shares. Realizing sales were felt in
the equipments and motors.
Railway stocks did little. but for
the first time in a long while the
copper and zinc and smelling groups
were taken up.
With only few exceptions. the
stocks receiving attention on the buy
ing side were again those belonging
to companies able to distribute more
to their shareholders With New
York Central at a new high. the
speculative community was more
than ever confident of an increase in
dividends. Lehigh Valley was another
Of the rails which was Influenced by
talk of a larger distribution.
Gas Stocks Reflect Strength.
The same incentive applied to Con-
solidated Gas and Columbia Gas
among the public utilities. So far as
concerned the strength in oil stocks,
IL appeared to be little more than a
reflection of a demonstration In the
Mexican specialties. The general run
of stocks was not much changed.
Steel common in the afternoon came
back. and SO did other leaders like
Baldwin Locomotive and Studebaker.
which had been rather heavy earlier
in the day. Cotton options drew close
to their high of the year. which was