The New York herald., 1922-12-13
FINANCIAL NEWS
AND COMMENT
Sterling Advances Above 4.63
as Stocks Are Bid Up to
Higher Levels. \

OVeIsnadoWing even the unmlStak-
ably better tone In the stock market
yesterday was tho violent advance m
sterling exchange. Continuing the rise
which has been In progress with scarce
ly an Interruption since early In Mo-
vember. the check rate on London ad-
vanced yesterday above 4.63. establish
Ing once more new high for tho
period OF almost four years which has
elapsed since the wartime pegging
measures We're abandoned. or course
there was considerable element OF
short covering In yesterdays move
ment. for many speculators In the for
eign exchange market nave refused to
believe that the recent advance was
built on sound foundation.
There was more than the speculative
buying behind the advance. however.
The removal of the pressure Of grain
and cotton bills in the last fortnight
has permitted the heavy demand Tor
sterling to go unchecked. One ex-
PLANTATION offered for the current
strength, and 1t Is not at all illogical,
is that American importers OF British
products vastly underestimateds the
utulduuS Oh lilclI puSlltSS AIu ~ uIdS-
ticafly curtailed their purchases Of
sterling during the period when grain
and cotton bills were freely offered
that now. at a time when the market
is virtually bare OF offerings. they And
1t necessary to enter the market and
bid for their requirements.
One of the strangest points in yes
terdays advance was that 1t occurred
at time when the British foreign
trade returns were published, showing
| the most unfavorable trade balance
since early summer. The British Board
OF Trade reported November exports
at f66. 10000. and imports at EOS. 800 600
Of which fs,14s,0eo was reexported
Very large gains in Britain's impor-
tations of food, drink and tobacco were
revealed in the report. while raw mate
| rials and manufactured articles also
added substantially to the totM In
crease. The November figures 5us'
made public bring the total for clever
months up to the following figures
Imports, f90s.517.oo0 exports, fs61..
COZ, 900 reexports, f95.2S2. 600.
All other important exchanges with
the exception of Italian lire. Belgian
| francs and German marks also advanced
yesterday. Those three showed moderate
| recessions. In the case OF Dutch ex
| change the, rate advanced to within five
one -hundredths OF a cent of parity.
In the stock market there was better
display OF strength than at any tims
since tho reaction began, almost two
months ago. Since the high points oi
the year were reached in the middle Of
October there have Been frequent rallies
but each Of them suggested nothing more
than sudden arm drastic short covering
movement. Yesterdays trading appeared
| to be much more than that. In the frs
place it was quite evident that poo
operations were once more coming to the
fore. At the same time it was plain tc
be seen that the better feeling noticed ir
the financial district In the last two o,
three days has had It's effect on publis
confidence and that there was more thar
the usual buying from outside sources.
This Is not to say that the public
entered the market to any large extent
| The fact is that the public has beer
virtually a non-existent element In ths
market for month, but yesterday there
was q quite evident tendency TO test the
state OF the market with "feeIers." Wher
] II was found that offerings of stocks
were scarce this sort of buying becams
moro confident. although the greatest
caution was still exercised. The bond
market was dull and some Of the Gov
/ ernment war loans receded slightly from
Mondays closing figures.
1 Extraordinary strength In the grain
market carried December wheat up TO a
new high for the year and lent encourage
nent to other markets. Cotton after
early weakness rebounded sharply and
closed with a substantial gain. Call
money rates, which got down TO 3% per
cent, / reflected the accumulation by
banking Institutions of a huge supply OF
| funds with which to take up the new
Government bonds offered this week. 1t
is quite likely that the call rate will be
rather high for few days after that
operation has been completed.