The New York herald., 1922-11-28
FINANCIAL NEWS
AND COMMENT
Sterling Exchange at Highest
Point Since 1919-Stocks
Depressed Again.

The outstanding feature of yester-
days financial markets was the re-
marSable rise of sterling exchange rates
Belgian francs. Exchange on London
sold above 4.52, not only a new high
mark for the year but the highest rate
since the summer Of 1919 when the
kept rates stabilized during the war was
removed. Aside from this movement
there was little of interest financially.
Stocks continued weak throughout mos.
few spots which showed the effects OF
special Developments. At the same time
grain and cotton prices were off, the
former rather sharply.
The rise in sterling came as a culini-
nation of a long period OF fir1nness, dur
ing which continental rates suffered
severe breaks. At the time French and
Belgian francs were dropping so vio-
from time to time, sterling either de-
ciined moderately or held its ground
firmly. On the other hand, when the
French and Belgian rates began their
IL the same direction with much greater
ease. So the establishment of a new
high at this time scarcely can be said
/ to be 4 surprise to those who have
! s+,,agaI ,l,a 49,, yr,at
/ The reasons for the strength of ex-
change on London are not difficult to
find. In the first place, Great Britain
has for a long time been making rapid
strides in reestablishins herself in the
worlds trade. Huge cuts have been
1 made in the adverse trade balance
which was hers after the ending of the
war. At the same time she has cut hcI
expenditures to the point where they
are more than covered by revenues
I thus eliminating the budget deficit
which has been so detrimental to the
rehabilitation efforts OF most of the
continental nations. During first ten
months of this year gold importations
into the United States aggregated $685..
361,191. a large part of which came
from Great Britain. and this too was a
tremendous factor in reestablishing the
pound sterling on a basis more nearly
normal.
There is one element in the foreign
| exchange market, however, which
makes comparisons with pre-war years
difficult. That is the element of specu-
lation. Back In 1913 fluctuations In
the rates of sterling. francs, &C., were
so narrow that movement which to-
| day Is regarded as normal was then
prodigious. The result has been u
! increase speculative interest in cx-
change and for this reason rates on
! foreign currencies, like the stock mar
| ket, will at times seem to run in direct
opposition to what ordinarily might be
expected from news Developments, &c.
Nothing can be said of the stock
market which has not been repeated
! over and over again. 1t was once
more purely professional affair. NOV
ing along the line OF the least resistance.
The decline of Standard Oil OF New
Jersey, for, instance, amounting to about
| seventy points since the stock dividend
was declared q few weeks ago. does
not mean that il was worth $40 a
share more then than now. but tha,
the speculation Of that day was being
grossly overdone and is now being cor
rected. Many new low marks for the
movement we're struck yesterday. most
Of them in the early afternoon hours.
About the same condition existed ir
the bond market, with most OF the
United States war loans slightly lower
Railroad issues for the most part
| ignored the relatively better earnings
figures for October and declined. Id
the grain market there was another
sharp reaction which carried December
wheat at one time as low as l1tH
about six cents bushel below the high
of only a week ago. Cotton declined
an average OF about fifty points. Cau
money opened at 4s4 per cent, out &c
clined to per cent. below the close.