The Cairo bulletin. (Cairo, Ill.) 1???-1928, 1911-07-24

" DIE FUN GAL l. A. II sot
at least, If it should be found that
even small money strain We're in
prospect at the height of the crop
moving period, such a strain would
automatically be relieved either By
an inward movement of the precious
metal or by an equivalent exchange
operations that would not require
the actual movement OF the metal
There is one point, however, that
should be kept in view in connection
; with the money situation and its re-
change securities, This is the large
increase that has taken place during
the year in the security holdings OF
our national and State banking in
stitutions The Comptroller OF tAe
Currency in his final report OF the
bank call Of June Z shows that ma
tional banks had on hand on that
date $995 ,475,14A in securities o.
$145,543,425 more than at the cor
responding date year ago, This
indicates that as a result of back
wardness in trade and manufactur-
ing circles the banks have been in
creasing in high-grade SECURITIES the
funds they could not use in their
regular loan and discount activities,
1t may be assumed that the national
banks in this respect represent with
air accuracy similar conditions in
our State banking institutions, and
Fit seems also quite logical that bank
directors would be apt to follow IN
their individual experiences tAe
policies they have outlined for thqir
banks This means that there has
been an extremely large accnmula,
ton Of securities that will be held
|nntil the usual demand for funds IN
mercantile and manufacturing %c-
tivites become insistcnt When this
condition fully develops there is apt
to begin a liquidation of securities
by banking interests in order TO re-
plenish the volume of their loanaEle
funds There viii be the added in
ducement or this liquidation in the
form of the large profits that have
already accrued on these invest
ments in addition to the specific re-
turns in the form OF dividends or in
terest rates This point OF danger
is, however by no means immediate.
as it will be necessary for other
equally profitable avenues for the
use of the funds to be opened before
holders OF these securities will be
tempted to liquidate. Real encour-
agement for liquidation is not yet in
sight and can hardly be expected
until money rental rates are forced
up to much higher figures than are
now current 1t has already been
shown that our large foreign bal
anees do not justify early expecta-
tons that Hianey rates will reach
this, active stage Furthermore,
bank directors and other eXperiepc-
ed financiers are not al all likely to
try to liquidate under adverse c3n.
ditions.
There has already been suftl-
cient advance in the price-leyel to
Justify discrimination in the selec-
ton Of investments; but it is not pn-
likely that in welI-selected stocks
and bonds additional values are still
in prospect. Meanwhile, there has
already begun homeward move
ment of important operators, -uaud
experience of the last few years has
been such as to justify expectations
Fthat August will be month Of corr
siderable ACTIVITY in stock exchange
circles with sufficient energy iil
fluctuations to permit profitable
campaign by operators who seek
profits by.quick in and ont tradingi
We have already in, sight another
season of agricultural prosperity, OF
abundant money of favorable pros
peots for mercantile aud industrial
activity and a feeling of growing
confidence among our people, We
haze Just passed through a period
OF curtailment and caution, Of re.
action from extravaganza. This
Esprit of caution shows signs OF cul.
minating and to that geytent, the
Iprospecte favor a.pon6dent merchafl
sdqbHyine movement that start
inaswith rthe individual copSumeri
cannot fail no promptly 4 spread M
allchannelsjo ,maInfaetWing and
distribution, and in turn rom Trade
to Finance. Such condition can,
in the long run, hardly fail to
promptly be reflected in higher
| prices for well-selected securities.