The New York herald., 1922-12-14
FINANCIAL NEWS
AND COMMENT
Another Sensational Rise Puts
Sterling Above 1853, While
Stocks Advance Again.

interest IN the financial markets yester-
Gay again converged upon exchange on
London. Tie violent advance, the cause
Of which remained as much OF a mystery
as ever. carried sterling rate above 4.es
representing a gain of about six cents
over the close OF Tuesday. That sharp
reaction should occur in the late trading
which resulted IN the loss of a large
portion OF the days advance was
natural. considering the violence with
which sterling has been bid up. Nor did
II alter for a single moment the seiisa-
tionaI character of the movement.
Bankers profess TO be completely at
sea with respect TO the reasons behind the
big movement. They admit that Great
Britain's improved trade position was
sufficient to cause n moderate reflection
IN the exchange market But nowhere
was It conceded that this reason sufficed
as an explanation Of the remarkable
performance given by British rates this
week.
Several theories were advanced. but
they were all just theories containing
elements which made them more or less
open TO question. Among the sugges-
tions offered were the following:
Manipulation by the British Govern
ment, preparations to restore Great
Britain TO n gold basis. the possibility
OF large gold loan Notwithstanding
there is no need for additional funds in
that country. &c.
One thing which made the movement
OF sterling interesting was the extremely
erratic nature OF the fluctuations. The
est point OF the day and before trading
ceased drop OF more than four cents
was recorded. This failed. however. TO
bring the Anal quotation down to Tues
that by far the largest proportion Of
each days gain recently has occurred In
the London market prior TO the begin
ming Of business here.
Another outstanding feature Of yes-
terdays foreign exchange market was
the advance OF another rate to parity.
Exchange on Amsterdam sold at 40.2
cents to the guilder, continuing a move-
ment which has been in progress for
several days. This Is the FIRST time
Dutch rates have touched par In three
and half years. All other continental
rates, except those of Sweden and
Greece. were likewise very strong.
In the stock market there was
further substantial rise, although no
very reliable Indications OF an important
public participation could be seen. II
Is more than nkely that the largest
portion of the present buying has come
from pool operators and from shorts
who have found their position a little
too dangerous. Some OF the railroad
shares and not a few specialities were
decidedly weak during the course OF
tire session. Steel stocks. with the ex-
ception OF Republic In which now fnan-
ing Is expected to become factor very
soon. were moderately strong.
Some rcason for the strength Of steel
shares can be found in the weekly re-
views OF the industry. Greater activity
In pig iron, with higher sales and a
continued high rate of production has
been 4 material factor in creating a
better feeling concerning the business.
At the same time stocks of finished
steel have been substantially reduced
The Pittsburgh district plants, accord
ing to iron Age, have been in operation
at rate as high as ~ per cent. which
certainly seems a Arm basis for ex-
pecting at least some measure Of satis-
faction in the returns for the end OF
this month.
December wheat again made new
high above i.24. Cotton advanced
moderately. All commodities have been
helped marketwise by the strength OF
sterling exchange. Call money ruled
around per cent all day, with one
brief dip to ~ per cent.