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Show STERLING RISE WEEK'SFEATURE British Gold Ratio Action' Forms Example for Rest ! of Europe Ry STUART P w 1 91 Special Correspondence of The Stand-era- 1 Kamim r Copyright. 1922. by The Standard-Examiner. Standard-Examiner. ) NEW YORK. June 3 From the standpoint of the general financial situation, sit-uation, the important incident of the last week has been the resumption of the recovery In sterling exchange, carrying car-rying rates well above the previous high of 1922 and to the h'bjheat since the early summer of 1919. The fact I f' ""Bl haa gone up Independ-.fJJ&i Independ-.fJJ&i ,h'; "lhor rlsn exchanice EOCS to ahow how much more hgi? Seal "rl,am has made than the other former belligerents of Europe Eu-rope in putting ItH financial houM- In Vhi th fln,t ,,Ulc" "rltuin pur chases in the outside- market- w-rc Jo cut down thr.t. reciconlnir In all the lems In the balance sheet, it began ,!V0, R ,cra" instead of a debit ,rP.,gn tradcv Second: It was aoio to bring about 'an equalization H,r,P"Vt'u'?mt"nt roveny and expenditure, expendi-ture, while reducing taxation and , lnE P'OVlrton to meet its American It uL , hi'",, r"r the Jast two years nor n,t ,?'in HU':l,,li red... Ing its paper pa-per note Issues nn.i thereby drawing eloper to the normal gold l.a-i- 8, ..LI !( 10 i. , !iSP achievements, 'he reduc-L reduc-L ?i ? ?apor currney la the most significant for the example it must glC to the l-fsf r.r I',.... the value of a metAJUa currency dc- v r l!!Km lh dreC "f 1 vctlbil-iVL vctlbil-iVL . e. , ir ulal. Usui ml- SS ilK,alnst " With a proportion of ,.r rl Mrte eola 'oldlngii to notes I. hi ',8 Pr ",nt lho Ualtod States war v. m hCr, " 5tood b"foro the Mrl tain ba.l K..i , ,,, ,; - ,,, f''n Bytha cl08" of this had fallen to 26 per cent,. At .he present! "mo it Stands at about 40 per cent ! 1 his does not mean that the gold1 ratio must get all the way back to where 1: was ,.),. y,.ar, Jlfii sterling returns to pr...V-Jr ,r". nan tvh.Vi, .'how lhe essential Pari which reduction of paper notes j iaiirrf0Pt,,on 10 go,d on hand haa NRELM H MOTE t IKCl LATION French note circulation, too. has t6nt, Th ratio ..f gold to notev 1 now something ovei 14; '"per cent in the year 1919-10. 1919-10. b,It it 111 contraata with a ratio befo.t tt- ent ,,n 1913 Slx months co!v nt V:Vur 11 a"fady had a Kold of 54 per cent. Thla tank to whiM 5 Per ccnt 1,1 10, from ThVfi has. rlsen now to "nly 6 Hit - ...mpuNon- thr,,u. j, , 'H r'-"" '" tl illuemal ex- inhj;r',1nlg ""V"6 l ,hc "cent S INTER ITIOK Mi LOAS J hero paper not.- inflation has not (ountrheCke,, l" ln tht o moti ountrles or eastern Europe, there has men TnVr' 7" " '""Pru?. -SeBtJ! 'he '-xchanges. The only reason rea-son why the German mark has not depreciated further during- . is Tin 40nte80' If becau" 2? hoP enah rnj?fnatlonaj loan which will enable Germany to balance its bud-get bud-get and put a stop to Its terrific admission of paper icrrmc MO El RATES 11 IR11 R The check to the investment market mar-ket has aKaln becn vc nollc , , n bSLS1 U.b6rty bonUs' tlJ ''e sure! have Sold again at their high of two Kh'Safc0 Hut - run as railway first mortgages, have gained gain-ed no ground since the middle of April and Indeed have fallen M.mewhat b. -ind. Two explanations appear read-y read-y enough ...... is the evidence that the money market struck absolute bottom when the rate on time loan a fortnight ..km f-11 lo 3 p. ,- .-.-nt. This iuc usuai eirect or a drawing dow n 01 New York balances by out of town banks, the result of which has been seen within the last few days in a pronounced hardening ... both' call and time monev quotations oi 1 pi r 01 n i w . j b The second explanation for the halt ln the upward movement In i prices li.-s 111 Hi. , omp.-ti, o.n 1 nun tl,.. unparalleled output of new capital issues. is-sues. These flotations last month aggregated ag-gregated $417,918,000 aganst $324.-681,000 $324.-681,000 In April and S323,17f..UO0 in May, 1921. For the first five months of the year, this new faian. iru; r.-.u h. .1 th -prodigious total of $1. 377.931,550. While it cannot be said that positive signs of saturation have yet appeared. It Is clear J hat the keen edt;e has been taken off tin Investment appetite spl.t FLvVflYK MOVl Mi n 1 Where the Investment market has paused tho speculative market has continued to push ahead This is logical log-ical enough, inasmuch as Investment alues have all along been mainly governed gov-erned by the course of money rates while speculative values have been more connected with tho development of the trade situation. A year ego the bond market turned the corner fully two months before the stock market. That wa because the penk was seen to have passed in thp money .-train, whereas it was not until the end of the summer that there was any encouragement en-couragement to believe that general business had struck bottom. But even the speculative movement on the stock exchange has become Increasingly uneven un-even If operations for tho rlso havo greatly predominated ln the past week, they have been mingled with more frequent and sharper reactions In Individual In-dividual Issues. This may not bo proof 'hat the campaign for higher prices Is culminating, but It does r dilate di-late that It has entered a risky stage. |