The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1911-05-08
A BUSINESS REVIEW OF THE
PAST WEEK BY HENRY CLEWS

New York, May s-Conditions un-
DERIVING stock exchange securities. I'M
like those attending mercantile and in
dustrial activities, are showing grad
uai Improvement. These cross-cur-
rents at the moment are to some ex-
tent natural, since in both instances
they bear directly on the supply OF
money and the channels in which mon
ey can be employed. Because our mer-
| chants and manufacturers are not re-
quiring their usual volume of working
| capital and banking facilities in their
own special lines, money is accumulat-
| ing at an exceptionally active rate.
Some other profitable use must there
| fore be found for this great accumula-
ton unless the owners of the funds
are willing that they shall remain idle
and in turn unremunerative. The lat
ter would be entirely repugnant TO ali
precedent. In normal times people
| with money seldom allow it to remain
idle; the natural course is to seek the
securities markets. In this connection
| it is worth while recalling that surplus
reserves of our clearing house banks,
| if we exclude the abnormal year of
! 1905 chat followed the financial up
heavel of 1900, are the largest held
at this season in any year since 1898,
amounting to $40,6S3,175. A year ago
the corresponding surplus reserve was
only s6.771 $50.
What are usually spoken of as the
floating supplies of securities are now
very largely in strong hands. There
has, however, for some time been a
gradual accumulation of dividend-pay-
ing stocks, and particularly bonds, by
smaller interests who have decided to
use their money in this, the only chan
mel that now appears available. 1t is
not only the buying side of this prop
osition that should receive considera
ton in this connection. Buying nat
urally advances prices, but when as al
present there is an indisposition tt
sell. that feature adds many fold t
the stimulative efficiency of the de
mand. Money is SO superintendent al
the present moment that not only i:
there no inducement to sell, but dis
tinct encouragement exists to refrair
from selling securities, as it is freel.
recognized that it would be impossi
BILE to utilize the proceeds to advan
tage. Banks and trust companies
which allow interest on deposits dc
not, for instance, pay anything like
the returns that are now available
from equally safe investments in seas
oned and safe securities. 1t will thu
be seen that the money situation re
mains fundamental feature o
strength in the stock market situation
Other influences, though more d
less unsettling, are not sufficient,
strong, in my opinion, to counterac
this fundamental feature of strength
that has already been mentioned. Tn
Trust decisions are according to tn
best opinion available, to be hande
! down on May Is. If not promulgate,
on that date they cannot be announce'
until Nay 90, for the Supreme cour
will take a fortnight's recess on Ma
10. Furthermore, should further dc
lay take place it will have to be unit
the October term of the Suprem
bench. These Trust cases have for S.
. long period been the source of niue
, intermittent unrest in the stock NAL
ket that their ultimate influence i
probably greatly overrated. Comment
l. by Mr.. Justice Holmes in recent de
, cision involving another question sus
!. gest that he is still in the minority O
, Trust and Trade combination matters
: 1t will be recalled that he was on tn
, minority side of the Northern Secur
ties case, and also presented dis
senting opinion in the recent Medicin
Contract Price case. which seemed t
so clearly demonstrate the mental a
I. titude of majority of the court a