The New York herald., 1922-06-03
FINANCIAL NEWS
AND COMMENT
Sterling Continues to Advance
While Stock Market Is
Strong and Active.

The financial markets were made In
teresting yesterday by a sweeping ad-
vance of sterling exchange to a shade
more than 4.4S. an upturn of more than
2 cents for the session to the highest
level since July. 1919, an exceedingly ac-
tive and strong market for stocks, which
contained some of the plunging specula-
tive movements of last April but was
stamped In character more particularly
by the rise of United States Steel to a
new high level for the year at 103. an
easement of the temporary call money
tension after loans had been renewed at
S per cent, the highest figure since Feb
ruary 27, and a brisk upturn of cotton
future prices. following publication OF
the Governments report showing a
poor condition of the growing crop
in the large producing States of Texas
and Oklahoma. Sterling receded to 447ia
at the close. a gain Of IL cents.
The rise of sterling was so abrupt, fol-
lowing the rise of a cent on Thurs
day, as to suggest that something be-
sides fundamental strength impaired by
the British fiscal position and the Ger
man reparations impelled the movement
The market acted as though the persist
ent pressure, which kept rates between
4.A and 4.44a4 during May, had been
lifted. The theory that the British
Treasury had renitted sufficient funds
to meet the expected f25.0OO. 900 interest
payment to the American Treasury in
thes autumn and had ceased selling ster-
ling bills for that purpose was voiced in
some quarters, but this was a matter
of conjecture. In view of the evident
upward tendency of exchange during
most of this year, it seems hardly prob
able that the British authorities would
have accumulated balances in bulk here
in a few weeks, months in advance of
the time when the funds would be needed.
More light presumably will be thrown on
the international markets in a few days,
especially if progress is made in the
German loan.
The rather complicated terms pro-
viding for the absorption of the Re-
public, the Midvale and the Inland
caused confusing movements Of the
shares involved, but it was plain that
sponsors of the merger thought that
$50 share was a fair market apprais-
al of the new stock issue. The stock,
on a when issued basis was supported
at that level in the curb at the same
time that Republic shares, as repre-
sentative of the other side OF the con-
solidaton, sold lower than an equiv
alent price would be expected to be.
1t was doubtful, however, If the merger
terms had much to do with the steel
share market. The powerful position
which the United States Steel Corpora
ton holds in the industry as empha-
sized by competing steel makers before
the Lockwood committee in New York
presumably furthered speculation in
Steel common stock. Advances of 4
to more than points among
specialities and oil issues. including
California Petroleum, Associated Oil
and the du Pont shares, were suffi-
ciently specta cular to point to~pool op-
eratlons, and haste to take profits in
the last hour clipped the tops off of
many of the strongest stocks. Call
money eased to AZ per cent. in the
afternoon, a movement that has become
familiar Immediately after an impor-
tant interest and dividend payment
date.
The early reaction of cotton, which
followed the publication of the con-
dition report as of May %. seemed 20
show disappointment among traders
because the percentage. 69.6. was about
in line with predictions and had been
discounted. but study of the 81 per
cent report for Texas and "a per cent
for Oklahoma, down 10 and z per cent.
respectively. from the figures of year
before, promoted buying in the after
noon. The options advanced Is to 40
points in the late movement.